A short while ago, ailing Kingfisher Airlines had some reason to heave a sigh of relief as various foreign investors showed interest in the company, but now the airline has received another blow. On December 17, 2012, lenders refused to give more funds to the airline and also demanded a partial payment of the dues.
Lenders earlier expressed confidence that the debt-strapped airline will be able to restart operations before the deadline given to them by the Directorate General of Civil Aviation (DGCA). However, the carrier failed to provide a timeline and at the lender’s meet the airline officials said that they were sure that the company’s license will not be cancelled.
On December 16, 2012, the State Bank Of India (SBI) said that there is no need for lenders to panic as the airline is looking for a solution to emerge out of the crisis. SBI said, “Kingfisher has been a good airline at some point of time. They are going through their set of problems. And there is no reason for bankers to panic as long as they say that they are looking for a solution.”
The lender has extended about Rs. 7,000 crore in loans to the airline, which has now been grounded. It has also offered an exposure of Rs. 1,500 crore to the carrier which has not run with full services since January 2012.