On Tuesday, Vijay Mallya assures that Kingfisher will not close down as operating on loss making route not possible.

On Monday, a eight hours long marathon meeting of the board of directors of the cash-strapped Kingfisher Airlines went inconclusive. Directors will meet again in Mumbai on Tuesday to draw up a rescue plan for the airline on Monday.

The board meeting was held on Monday to chalk out a rescue plan for the carrier as it cancelled many of its daily flights and also is struggling with a pilot exodus and huge debts. The board met to discuss the company's performance in the second quarter of the current fiscal and to plan the financial restructuring of the company. In 2010-11 Kingfisher reported a loss of Rs.1,027 crore, now it’s working on a strategy to cut its burgeoning Rs. 7,000-crore debt.

The board will meet again on Tuesday after the company's chief executive and chief financial officers interact with the bankers.

The company has borrowed from a consortium of 11 banks, which would have to be satisfied with the viability of the company.

The board meeting came in the backdrop of mounting anxieties about the stability and the financial health of the airline.

KF also owes huge amounts to oil companies, the Airports Authority of India and private airport operators. The airline has not posted any profit since its launch five years ago, and reported a net Rs.263 crore in the last quarter.

Senior officials of the airline will address the media on Tuesday after a meeting with representatives of the lender banks.

Kingfisher Q2 loss doubled

Cash-strapped Airline Kingfisher on Monday reported that its net loss doubled to Rs 468.66 crore in the quarter ended September 30, 2011, as higher fuel prices depressed operating margins. 

Kingfisher Airlines controlled by billionaire Vijay Mallya, reported a wider second-quarter loss as it cuts flights, seeks government help and asks banks to increase credit limits.

The net loss doubled as compared with 230.81 crore in the same period last year. Sales climbed 11 percent to 15.3 billion rupees.

Bankers have clearly said that the Kingfisher's promoters  need to infuse Rs 800 crore worth of fresh equity into the company if they want second restructuring of existing debt. The bankers have asked the airline to sketch out a credible plan to come out of trouble.

The lenders -- a 13-bank consortium led by SBI are meeting the Kingfisher management. The management is yet to decide on ways to soften the troubled airline's Rs 7,057.08 crore debt burden. Kingfisher suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore.

Bankers ask Kingfisher to infuse Rs 800 cr fresh equity

Bankers to the cash-strapped Kingfisher airline on Monday asked its promoters to infuse Rs 800 crore worth of fresh equity if they are to consider a second restructuring of existing debt, as opposition mounted to any bailout of the private carrier.

The Kingfisher Board also had a crucial meeting in Mumbai to work out a debt restructuring plan on the eve of the announcement of its latest financial results. The bankers have asked the troubled airline to come out with a "credible" plan.

The lenders--a 13-bank consortium led by SBI, who were yet to decide on ways to soften the troubled airline's Rs 7057.08 crore debt burden, are due to meet Kingfisher management here on Tuesday.

The bankers have made it clear that the promoters have to put in at least Rs 800 crore worth of fresh equity as the lenders cannot act as promoters of the airline.

"Bankers want more information on their fleet, equity, continuation of fuel supply. Banks can come in as lenders not promoter. We will respond how it unfolds," said Pratip Chaudhuri, chairman of SBI which leads the 13-bank consortium that has financed Kingfisher.

On whether the bank will consider making fresh advances to Kingfisher, SBI managing director Hemant Contractor said, "We have to be satisfied about the viability of the company.

There is no point restructuring if the company's operations are not going to be viable.

"We have asked them to come up with some fresh funds if the banks are to at all consider their request for restructuring. We want to see more funds coming from the company itself", SBI has the largest exposure to Kingfisher--Rs 1,400 crore--among the lenders.

Amid the debate over bailout for Kingfisher, SpiceJet chief Neil Mills said the government should not use taxpayers' money to revive a private sector company.

Mallya on his part said he is not seeking taxpayers money.

"No bail out involving tax payers money. We want working capital management assistance." he said in his latest tweet.

The debt-ridden airline continued with flight cancellations for the eighth straight day. The airline did not operate at least 40 flights today.

Besides SBI, the consortium includes ICICI Bank, IDBI Bank, Punjab National Bank, Bank of Baroda, Bank of India, UCO Bank, Oriental Bank of Commerce and State Bank of Mysore.

Together, these banks now hold a 23.4 per cent stake in the airlines and have an exposure of over Rs 7,700 crore.

The airline has suffered a loss of Rs 1,027 crore in 2010-11 and has a mounting debt of Rs 7057.08 crore. According to industry estimates, Kingfisher is losing about Rs 3-4 crore a day due to the flight cancellations.

The lessors, who arrange aircraft on long-term leases for companies, have been negotiating with Kingfisher for the past few days reportedly after the airline delayed payments on some aircraft.