With Kingfisher Airlines facing huge turbulence, there is still uncertainty over moves by a consortium of bankers to offer fresh loan for the beleaguered carrier, which came out today with a curtailed flight schedule.
Notwithstanding reports that the lead banker of the consortium State Bank of India (SBI) has agreed to provide Kingfisher a Rs 1,650 crore ($336 million) relief package, the bankers were tight lipped about what they were planning.
However, sources in the consortium said that Kingfisher could look for any fresh loans only if the main promoter United Breweries gets an infusion of fresh equity.
The air carrier is understood to have been told by the bankers that it should get at least 25 per cent of the Rs 3,000 crore loan it is looking for in the form of fresh equity.
The sources said that chairman of the Group Vijay Mallya is not in a position to give any commitment and the bankers will take the next step only on such an assurance.
SBI chairman Pratip Chaudhuri declined to comment on the issue saying client confidentiality prevents him from talking about a particular company.
However, Civil Aviation Minister Ajit Singh said if banks can loan them money "it is all good."
"It is between the company and the banks," he told reporters.
Finance Minister Pranab Mukherjee declined to comment on reports of SBI coming out with a bailout saying "as and when events take place you will come to know."
The airlines has a debt of Rs 7,057 crore ($1.5 billion) with SBI's exposure alone placed at Rs 1,500 crore.
On reports that it is considering bailout for Kingfisher, SBI shares plunged by 8 per cent in the stock market.