Revival plan for grounded Kingfisher submitted to aviation regulator

Vijay Mallya-led Kingfisher Airlines CEO Sanjay Aggarwal today met the aviation regulator DGCA to submit the revival plan for the grounded airline.

Revival plan for grounded Kingfisher submitted to aviation regulator

Vijay Mallya-led Kingfisher Airlines CEO Sanjay Aggarwal today met the aviation regulator DGCA to submit the revival plan for the grounded airline.

The cash-strapped airline has sought renewal of flying license as the additional funding for restarting the airline will be provided by parent company UB Group. However, lenders to the airline told CNBC-TV18 that the airline has not yet submitted a clear revival plan or details regarding the time frame of restarting operations to bankers.

Last month, Vijay Mallya had said that the fund transfer from United Spirits to the airline is on track since the Competition Commission of India has cleared the stake sale in the Indian liquor company to Diageo.

Saddled with a debt of over Rs 7,000 crore the airline had in January this year said that it will resume operations by March with seven aircraft and will later extend it to over 20. However, it has not been able to convince the regulator and also its lenders about how it will raise funds.

Meanwhile, a report in the Financial Express says lender to the airline State Bank of India has sent a legal notice to the airline to recover its loans despite lenders having sold shares of United Spirits and Mangalore Chemicals and Fertilisers. It seems banks are still not confident of recovering their dues from the airline which has failed to clear dues of employees and other stakeholders like the Airport Authority of India, oil marketing companies etc .

“It looks like we will have to invoke the corporate guarantees given by United Breweries Holdings (UBH) to recover the loans,” a banker with direct knowledge of the development told the paper.

On Tuesday, the airline informed the stock exchanges that banks that had lent to the airline have invoked 3.13 million pledged shares.While at the beginning of the month, lenders had invoked pledge shares in United Spirits worth Rs 500 crore.

Banks have 26 million shares USL, of which around 10 million have already been sold.

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