Kingfisher seeks over Rs2,000 cr working cap loan from SBI1 min read . Updated: 05 May 2009, 04:24 PM IST
Kingfisher seeks over Rs2,000 cr working cap loan from SBI
New Delhi: Vijay Mallya-run Kingfisher Airlines is understood to be finalising a working capital loan of over Rs2,000 crore from the country’s largest lender, SBI, mainly aimed at clearing its fuel bills.
The carrier, which has a total outstanding of over Rs785 crore to IndianOil Corp (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), is looking to service the dues through the loan from SBI, according to industry sources.
“Kingfisher Airlines is in very advanced stages of getting the loan from SBI, which could be over Rs2,000 crore. This should help the carrier meet its immediate and short-term capital requirements," a source added.
When contacted, a Kingfisher Airlines spokesperson declined to comment on the issue, citing confidentiality.
“Fund raising is an ongoing issue and because we are bound by confidentiality and non-disclosure agreements, it will be inappropriate to offer any comment at this stage," the spokesperson said.
SBI officials could not be contacted for comments.
As on 20 April, the carrier owed IOC about Rs160 crore. Kingfisher also owes HPCL — its largest ATF supplier — Rs336 crore, and BPCL Rs290 crore, the sources said.
IOC had encashed a Rs50 crore bank guarantee after a cheque issue by the carrier towards fuel dues bounced and it had put Kingfisher on cash-and-carry about 2-3 months ago after the airline failed to honour its commitment of making timely payments for fuel dues as had been agreed last year.
On the IOC issue, the Kingfisher spokesperson said: “It is not Kingfisher Airlines’ policy to discuss its relationships with suppliers in the public domain ... Kingfisher Airlines is operating its full schedule of flights daily."
Both IOC and BPCL have stopped credit to Kingfisher and are asking the airline to make payments each time it refuels. HPCL, however, continues to give some credit to the airline.
Industry sources said Jet Airways, the other private carrier that was part of the bailout package, has been clearing its dues regularly. Its outstanding to IOC is just Rs30 crore and it owed BPCL Rs80 crore.