Debt-ridden Kingfisher Airlines has received preliminary approval from lenders for a debt restructuring plan to cut interest costs. The airline, which owes more than Rs 6,000 crore, is being restructured as part of the Reserve Bank of India-sanctioned relief package for the airline industry. SBI Capital Markets, representing a consortium of 15 banks, is expected to announce a debt recast plan for the carrier by December.
Ravi Nedungadi, chief financial officer at the carrier’s parent UB Group said: “Now each of the bank board has to necessarily pass it, so we’ll wait for them before commenting on the restructuring plan.”
Vijay Mallya, UB Group chairman, had recently told shareholders that in the restructuring process, there will be an interest rate reduction to an average of 11%: “It will be a door-to-door tenure of nine years, with two years as moratorium and a seven-year easy repayment schedule,” he said.