India's United Breweries Group (UB Group) may inject more cash into Kingfisher Airlines after banks threatened to call in their loans to the grounded carrier.
UB Group, the largest shareholder in Kingfisher, recently sold a majority stake in its UB Spirits business to global beverages giant Diageo for $2 billion and pressure has been placed on chairman Vijay Mallya to use some of those funds to recapitalise the airline.
Kingfisher owes Indian rupees (Rs) 75 billion ($1.38 billion) to a consortium of banks led by the State Bank of India, which has been threatening to call in the loan and move to take control of collateral that was put up. This reportedly includes shares in other UB Group companies and real estate owned by Mallya.
UB Group said in a statement that it has "received no formal communication from the banks till date" and adds that it is in "continuing discussions with [the banks] on ways to bring down their exposure, inter alia, from the proceeds of the Diageo transaction".
Kingfisher was grounded in October last year following six years of losses. The airline has thus far failed to gain clearance from India's directorate general of civil aviation (DGCA), which has expressed concerns about the financial state of the carrier, for a plan to get it back in the air.
Banks are said to be waiting for UB Group to commit additional funds to Kingfisher to shore up its balance sheet before extending any further finance to the airline.
Kingfisher reported a net loss of Rs7.6 billion for the quarter ended 31 December, during which the airline recorded no revenue.