Spelling more trouble for the debt-laden Indian private air carrier Kingfisher, a consortium of its lenders Friday rejected the company’s Rs. 2 billion working loan request. The company’s shares plummeted over 5 percent in the Bombay Stock Exchange following the reports.

The SBI-led lenders consortium, which has a total exposure of about Rs. 70 billion in the cash-strapped airlines, stands firm that the requests for fresh loans would be considered only after the promoters bring in fresh equity to the carrier.

Liquor baron Vijay Mallya-controlled Kingfisher Airlines failed to provide any kind of assurance to the lenders regarding the infusion of the fresh equity.

According to a PTI report quoting the bankers, Kingfisher asked for more time to come up with the revival proposals, citing that government's decision to allow FDI in the aviation sector had come just a few days ago. However, Mallya did not give any definite time period for infusing the capital.

At a meeting that was attended by the lenders and Vijay Mallya at his company’s headquarters in Bangalore, the consortium asked the SBI Capitals to create a framework for reviving the loss-making airlines within the next 3-4 weeks. 

The air carrier with about Rs 90 billion debt burden at present is operating under a contingency plan, running a few schedules. The carrier, named after Mallya’s flagship beer brand Kingfisher, has not paid salaries and credit dues since February last.   

The lenders, reeling under pressure due to their exposure to Kingfisher Airlines, have asked Mallya to bring in fresh capital up to Rs. 20 billion to the carrier. The lenders, including top lender SBI, have started treating their exposures as Non-Performing Assets since January. SBI alone has an exposure of Rs. 15 billion in the air carrier.  

“Our immediate priority is that the airline makes payments regularly,” said a senior banker from a public sector bank to Business Standard. 

Mallya has maintained that his company, United Beverages, is in talks with private equity players to invest in the carrier. His United Spirits Ltd recently confirmed that it was in talks with liquor major Diageo for selling its stake to the London-based firm.