Tooling up
Deprived of adequate insolvency protection, Indian companies in distress are struggling to restructure

December 2011, India Business Law Journal

India’s third-largest airline, Kingfisher Airlines, is desperately seeking financial stability after suffering a series of
losses – most recently US$90 million between July and September 2011 – and accumulating a debt of US$1.5 billion since its inception in 2005.

According to its chairman, Vijay Mallya, the airline needs US$150 million for its working capital requirements
and has requested concessions on the interest payable on its loans.

Kingfisher’s lenders include 13 Indian banks, mostly government-owned, that in December 2010 implemented a voluntary financial restructuring package of US$260 million. The leader of the lending consortium, State Bank of India, which has a US$290 million exposure to the airline, has stated that no further restructurings are planned.

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