SBI extends Rs 500-cr loan to Kingfisher

Airline Is Also In Talks With Other Banks To Raise Around Rs 2,000 Crore

 STATE Bank of India (SBI) has agreed to provide Rs 500-crore loan to Kingfisher Airlines, helping the Vijay Mallya-owned airline to meet its immediate cash needs. The airline is in discussions with several banks to raise at least Rs 2,000 crore.
    SBI is believed to have cleared a three-year term loan of Rs 500 crore earlier this week. "Kingfisher has an immediate funding gap of around Rs 1,800-2,000 crore. It has been in discussions with a few public sector banks. SBI has cleared Rs 500-crore facility in the past few days, while talks are on with a few other banks," said a source close to the development.
    A Kingfisher Airlines spoksperson declined comment. "It will be inappropriate to offer any comment at this stage as fund raising is an ongoing process and we are bound by confidentiality agreements," said the spokesperson.
    The domestic airlines, faced with mounting losses, have been lobbying hard with the nationalised banks to extend fresh credit facilities. This comes after the private banks declined to extend more loans to the aviation sector.
    Kingfisher Airlines is holding talks with three other public sector banks — Bank of India, Bank of Baroda and Punjab National Bank —for raising additional debt facility of Rs 1,500 crore. The airline has raised debts from private banks, mainly ICICI Bank, in the past.
    In context, it must be mentioned that UB Holdings (UBHL), the group's investments holding entity, recently sought shareholder approval to hike the extent of corporate guarantees and security creation for Kingfisher Airlines to Rs 12,000 crore, up from Rs 7,500 crore earlier.
    Kingfisher Airlines, with around 27% share of the domestic passenger market, has talked about raising $400 million through private equity route, even though talks in this regard has not progressed on account of sharp valuation differences. Mr Mallya has also been lobbying for FDI in the aviation space that would allow domestic airlines to sell equity to strategic investors at relatively better valuations.
Intel & IBM acquire 24% in Deccan Express
BANGALORE: Intel Capital and IBM may together pick up about 24% stake in aviation entrepreneur Capt GR Gopinath's start-up cargo airline Deccan Express for $30 million, according to a source close to the development. Deccan Express is expected to start operations later this week with two A-310 aircraft operating in Hong Kong-New Delhi-Chennai and Dubai-Mumbai-New Delhi sectors. Sources said Intel Capital was expected to invest $25 million, while IBM would bring in the remaining $5 million.Deccan Express declined to comment on its impending launch as well as fund-raising plans. Media reports, including in ET, have already indicated about Intel and IBM holding talks with Deccan Express. Capt Gopinath has invested around $25 million in his personal capacity, and has raised nearly $10 million in debt from SBI. — Our Bureau

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