New Delhi/Mumbai, Feb 13 (IANS) Cash-strapped Kingfisher Airlines' scrip tanked 4.94 percent in Wednesday's trade as bankers talked about a recall of nearly Rs.7,000 crore of loans to the passenger carrier.
The company's scrip at the Bombay Stock Exchange (BSE) fell 4.94 percent - 0.55 points at Rs.10.58 per share from its previous close of Rs.11.13. The scrip touched its lower circuit limit and closed at that level.
The crash in the scrip value came as the company's bankers have started consultations about a possible recall of loans after Tuesday's meeting with the company's management, in which the lenders did not find any viable plan to restart operations.
The State Bank of India (SBI)-led consortium of 17 lenders who have a combined exposure of Rs.7,000 crore have said the airline management has not been able to provide any time-frame for the restart of operations or servicing of loans.
On Feb 5, the debt-ridden airline had reported a net loss of Rs.755 crore for the third quarter of the current fiscal.
The airline currently has an estimated financial debt of around Rs.8,000 crore, which it owes to a consortium of banks, aircraft leasing companies, airport operators, oil marketing companies and other vendors.
It has even failed to clear its employees' dues of several months. The airline said in the filing that it has made significant progress towards complying with regulatory requirements for it to restart its operations and reinstate its flying licence.
Kingfisher's flying licence was suspended Oct 20, 2012, following a strike by employees that crippled the carrier's operations. The licence officially expired Dec 31, 2012, while a revival plan the airline submitted to the Directorate General of Civil Aviation (DGCA) was rejected due to the lack of "credible restart" details in the plan.
The airline, promoted by Vijaya Mallya, has two years to renew the licence to fly.
Mallya had written to employees Jan 10 intimating them of a two-step plan submitted to the aviation regulator to re-start operations.
"We have submitted a detailed restart plan to DGCA in two parts. The first part deals with a limited re-start utilising seven aircraft ramping up to 21 aircraft in four months," Mallya wrote in his letter.
According to Mallya, the second part of the plan envisages a full scale rehabilitation of the airline by increasing the fleet size to 57 aircraft within 12 months of recapitalisation.
"Both plans contain detailed information on key assumptions and funding requirements, including payment of outstanding salaries to employees," he wrote.
Mallya had said the limited re-start plan was being targetted for the beginning of 2013 summer schedule and required a funding of about Rs.650 crore, which would be provided by the United Breweries Group and associates.
The bankers seem unimpressed with Mallya's assessments.
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