16 November 2011

Kingfisher Has Not Sought Govt Bailout, Says Mallya

Battling financial crisis, Kingfisher Airlines Chairman, Mr Vijay Mallya,said that he has not asked for a bailout from the government but wants the lenders to help with 700-800 crore working capital as short-term needs and interest concessions.

Facing all-round attack from political parties which are opposing any bailout for his airline, Mr Mallya said: “We have not asked for any bailout from government. We have not asked the government to dip into the taxpayers’ money. We have never done it, we will never do it.”

 After announcing the second quarter results, which showed a loss of Rs 468.66 crore, he told a press conference that “we are in dialogue with banks to open Letters of Credit which can help us recover debt and repay our high cost rupee loans.”

“We have not asked for a concession. We have not asked for a hair-cut. Our demands with the banks are mainly two-folds. One is to meet short-term capital needs which have gone up and concession on interest,” he said.

The banks have not told him formally that “we should infuse capital. If there is requirement of recapitalisation or infusion of additional equity, we will consider it.”

Mr Mallya also said he has not sought any restructuring of the loan.

Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7,057.08 crore. Together, the 13-bank consortium now holds 23.4 per cent stake in the airline and has an exposure of over Rs 7,700 crore.

Asked how much working capital would the airlines need, Mr Mallya said: “We require Rs 700-800 crore, which includes both fund and non-fund based. ... We have pursued every opportunity to raise capital.”

Welcoming the Prime Minister Dr Manmohan Singh’s recent statement that the Government would find ways to solve the aviation industry’s financial troubles, he said: “The Prime Minister is an economist who understands the importance of connectivity.”

About the dues to oil companies, he said the airline has paid two state-owned oil companies — Indian Oil and Bharat Petroleum — in full. “We don’t owe them a single paise.”

On the Rs 600-crore worth of unsecured dues to HPCL, the Chairman said the oil firm has been given bank guarantees “and our unsecured credit has now come down to Rs 40 crore only’’.

The chief of the UB Group, which runs Kingfisher, also announced that the company has applied to the Directorate General of Foreign Trade (DGFT) for direct import of jet fuel, which would reduce fuel costs drastically. Jet fuel costs are almost 50 per cent of the total operating costs of the airline.

Mr Mallya also said there were varied credit lines with various suppliers and vendors of the airline and refuted reports that certain lessors wanted to take back some of the leased aircraft in the Kingfisher fleet.

Referring to the cancellation of more than 200 flights over the past week, he justified the move saying it was a “commercially prudent” decision.

“We cancelled flights not because we could not afford to. Even today Kingfisher is operating the rest of its schedule ... We could have handled the situation better. But it (flight cancellations) was a commercially prudent decision,” he said.