Kingfisher seeks funds, interest concession from banks

Mumbai, Nov 15 (PTI) Battling a crisis of survival, Kingfisher Airlines Chairman Vijay Mallya today sought help from banks to raise short-term funds to the tune of Rupees 7-8 billion (USD 140-160 mn approx) as working capital and interest concession and ruled out its closure. On a day his company reported a deepening loss figure of Rs 4.69 billion (abot USD 93.8 mn) for the second (July-September) quarter of the current 2011-12 fiscal, he asserted that "to write the epitaph of Kingfisher constantly is not fair." In a bid to shore up its financial position, the company has filed a Rs 20 billion (about USD 400 mn) rights issue with India's market regulator SEBI to raise capital. It has also applied to the Directorate General of Foreign Trade (DGFT) for direct import of jet fuel to reduce fuel costs drastically. Jet fuel costs are almost 50 per cent of the total operating costs of the airline. Addressing a press conference after declaration of the results, Mallya said he has not asked for a bailout from the government or for restructuring of loan from banks. Facing all-round attack from political parties which are opposing any bailout for his airline, he said, "We have not asked for any bailout from government. We have not asked the government to dip into the taxpayers' money. We have never done it, we will never do it." Maintaining that lessors had some funds as security for aircraft maintenance, he said "We are in dialogue with banks to open Letters of Credit for these lessors which we can use to recover debt and repay our high cost rupee loans." Rejecting reports that he had sought a second restructuring of his debt, Mallya said "We have not asked for a concession. We have not asked for a hair-cut. "Our demands with the banks are mainly two-fold. One is to meet short-term capital needs which have gone up and concession on interest." The banks have not told him formally that "we should infuse capital. If there is requirement of recapitalisation or infusion of additional equity, we will consider it." Kingfisher has suffered a loss of Rs 10.27 billion (about USD 205 mn) in 2010-11 and has a mounting debt of Rs 70.57 bn (about USD 1.4 bn). Together, the 13-bank consortium now holds 23.4 per cent stake in the airline and has an exposure of over Rs 77.00 bn (about USD 1.5 bn). Welcoming Prime Minister Manmohan Singh's recent statement that the government would find ways to solve the aviation industry's financial troubles, he said, "The Prime Minister is an economist who understands the importance of connectivity." Kingfisher is one of the major private Indian airliner companies. The airliner operates a wide network of flights across the country and some abroad. During the past few days passengers of the airliner have been faced with the problem of cancelled flights both on non-productive routes and on routes with multiplicity of flights. PTI Caption for pic: Kingfisher Airlines Chairman Vijay Mallya speaks during a media conference for announcing the 2011-12 Q2 results of the company, in Mumbai on Tuesday. PTI Photo