By IANS,
Mumbai : Kingfisher Airline’s board will meet here Monday to chalk out a rescue plan for the cash-strapped carrier, which continues to cancel many of its daily flights while struggling with a pilot exodus and huge debts.
“The board meeting is scheduled for today to discuss the July-September quarter performance,” a company official told IANS.
The meeting comes in the backdrop of increasing anxieties about the financial health of the airline.
The country’s stock markets, vendors and lenders would also be keeping a close watch on the company’s quarterly results.
The board meeting is expected to come out with a framework on cash infusion into the airline, as well as cutting some of the Rs.7,000 crore debt.
News of the company planning to cut costs and infuse capital buoyed trading sentiments and the airlines’ scrip at the Bombay Stock Exchange (BSE) rose by around six percent at Rs.21.20 in early hours of trading.
Earlier, the company’s stock at the BSE declined over 19 percent Friday to a new low of Rs.17.55. It, however, pared some of the losses and closed the day at Rs.19.65, down 9.45 percent.
The company’s lenders said that they would hold a meeting with the airline.
“We have had a meeting with Kingfisher and we will hold a meeting on Tuesday. We have asked them to furnish details about the condition of their fleet. We are committed to helping Kingfisher and they are a valued customer,” Pratip Chaudhuri, chairman of State Bank of India (SBI), told reporters on the sidelines of the India Economic Summit.
The SBI leads the consortium of 13 banks which has lent to the airline. SBI is also the biggest lender to Kingfisher with loans of Rs.1,500 crore. Private lender ICICI Bank has also given loans of upto Rs.400 crore to the company.
Meanwhile, the company’s promoter Vijay Mallya said that the company has not asked for any kind of financial bailout from the government, but is only looking for working capital management assistance.
“Why do you say bailout? There’s no bailout involving taxpayers’ money. We want working capital management assistance,” Mallya posted on micro-blogging site Twitter Monday.
Mallya, however welcomed the statement by Prime Minister Manmohan Singh Saturday that the government will find ways to help the airline and that he will meet the Civil Aviation Minister Vayalar Ravi on the matter.
“The honourable PM is an economist and understands the importance of connectivity that goes together with economic growth,” Mallya tweeted.
Meanwhile, in a statement, the civil aviation ministry Saturday said: “This is to clarify that no such bailout package is pending before the government nor has been proposed by ministry of civil aviation for Kingfisher Airlines.”
The latest developments come after the airline curtailed 40 flights every day since Nov 9 — a move, the company said, was taken to rationalise route plans and improve yields.
Currently, the airline also owes huge amounts to oil companies, the Airports Authority of India and private airport operators GVK and GMR groups. The airline has not posted any profit since its launch five years ago, and reported a net loss of Rs.1,027 crore last fiscal and Rs.263 crore in the last quarter.