Mumbai: Swati Khandelwal of CNBC-TV18 struck up a conversation with SBI chairman, Pratip Chaudhari about the Kingfisher saga. Check out his comments. Below is the edited transcript of the interview.
Q: You had a meeting with the Kingfisher management last week where SBI Caps did show their viability report. What's your response on the report and the concerns that you have raised on the same?
A: It's very easy to generate a report making rosy projections, what is more important is the company has to become EBITDA positive. So even if they don't service the debt and service the interest on existing debt, but on a going forward basis, they must be cash positive.
Q: So what are the options that you have given the company now or for that matter SBI Caps to come back and what are the conditions that you have now put forward?
A: It's not conditions. It is something that is good for the company and company also knows. The company needs more equity. So we have encouraged the company to source more equity and they are talking to many investors to get more equity.
Q: How soon are they looking to bring that in because that talk has been going on for couple of months now that they said that they have found some investors is that really happening?
A: I can't answer that, only the company can answer that that how far they are. But we think that the starting point has to be induction of equity.
Q: Has the company communicated to you about the possibility of investors coming in or having identified at least one investor who they will be bringing in to put in some equity?
A: They have not named any investors, but they are saying that they are in dialogue with multiple investors. Who finally comes in or who all come in would depend on the relative terms and where the buyer and seller both agree on a price. So we are indifferent as to who would be the investor, we don't have any pick and choose policy that we like so and so and don't like so and so. Anybody who comes in with the equity is welcome because it helps the company.
Q: How minimum equity is what you have expected?
A: That numbers are not yet firmed up, but Rs 1000-2000 crore is the amount that the airline needs, the kind of scale and the volumes they have, is the starting point.
Q: So that is the kind of money they need to bring in immediately?
A: Sooner the better.
Q: Do you think the government should step in at this stage because we know that there are salaries which are pending for over two months for the employees?
A: I can't comment on that, that's between government and the company. So, I don't know whether the government will step in for a private airline or for that matter any private company.
Q: But do you subscribe to this thing?
A: I have no views on this.
Q: Whether or not there is a meeting now slated because SBI Caps had asked you to come back with your feedback on the report and what you want, so, this week is there any meeting?
A: Meeting can happen whenever needed, but meeting does not necessarily lead to any particular result. So, it is for the company to come up with and say where they stand with the equity, otherwise meeting can happen tomorrow, it can happen right away.
Q: But there is nothing that is slated so far?
A: I am not aware because these are dealt with my deputy MD for MCG.
Q: There are some names like SC Lowy which is a financial institution based out of Hong Kong who could perhaps come in and put in money. There are talks about some foreign airlines, but again we know that right now the aviation FDI rules do not allow any company to come and put some equity stake. So in your view, is it a private equity company or a foreign airline that they may be looking at tying up or signing an LOI with?
A: I have no business to suggest who the investor would be and as I have said, we have no preference or dislike for any investor. Let any investor come in, what is important is equity, and not the name and the origin or the business of the investor.
Q: So basically what you are saying is unless the company brings in equity you will not go ahead and help them on working capital loan?
A: It's not that, but equity is a pre-condition almost.
Q: So, you will want them to bring in only then you can look at it?
A: It does not work on that basis, you do this, it's an overall process, and in the overall process, the company would help itself by getting in equity.
Q: Are you hopeful they will be able to bring in?
A: They should.