Big Cloud Computing Trends

What will happen in cloud computing in 2013? Henrik Rosendahl, senior vice president of cloud solutions at Quantum – a maker of data management, backup and recovery products – recently weighed in with some thoughts on a number of trends to watch. Based on what the company is hearing from customers, IT managers should be thinking about the following cloud “hot spots” as they plan for the coming year:

Backup to the public cloud as an extension of virtual infrastructures. Enterprises have been looking at private cloud solutions as an extension of their virtual infrastructures, where a VMware environment works in concert with a local backup solution, Rosendahl says. But how do you back up your data when it’s sitting in the public cloud, where you aren’t in control of it any more? Addressing this challenge will become more urgent this year, he says, as emerging solutions gain traction.

Cloud subscription models. Cloud continues to generate hype and attention, for both consumers and enterprises, Rosendahl says. “Most enterprises are still in the early adopter phase, but we’ll begin seeing more customers who are prepared to discuss their experiences with [the] cloud,” he says. The cloud subscription model is enabling a “pay as you grow” approach to adding backup/archive resources that allows companies to pay only for the capacity they need, when they need it. “We’ll soon have more data points to judge how the promise of this approach is playing out for a range of industries,” he says.

Cloud-based disaster-recovery-as-a-service. Leveraging offsite resources, such as the public cloud storage for backup and DR, is proving increasingly viable as a best practice for a wider range of companies, Rosendahl says. “This area is gaining traction as enterprises and SMBs look for cost-effective ways to implement a DR strategy,” he says.

Integrating de-duplication and cloud data protection. Deduplicating data before it is sent to a cloud storage service will increasingly be viewed as an integral component for cost-effective cloud-based backup, Rosendahl says. The services that aren’t specifically designed to optimize this capability will find it harder to compete, he says.

Graduate Infrastructure & Cloud Computing Consultants TARGETjobs ... Linux Administration, Solaris Administration, Microsoft Wintel Administration, Networking and Network Management, Storage Administration, Cloud Computing and Virtualisation, Client/Server Support, Desktop Support, Database Administration ... See all stories on this topic »

How IT pros can control their private cloud computing destiny TechTarget Private cloud computing makes sense for some, but not all, organizations. Companies with security and privacy concerns, for example -- particularly concerns that relate to sensitive workloads or government regulatory and/or compliance requirements ... See all stories on this topic »

EESC puts forward alternative EU cloud strategy ComputerWeekly.com The European Commission's (EC) cloud computing strategy fails to spur the development of cloud services and the emergence of European cloud computing infrastructure, the European Economic and Social Committee (EESC) has warned. Members of the ... See all stories on this topic »

Graduate Infrastructure & Cloud Computing Consultants TARGETjobs ... Linux Administration, Solaris Administration, Microsoft Wintel Administration, Networking and Network Management, Storage Administration, Cloud Computing and Virtualisation, Client/Server Support, Desktop Support, Database Administration ... See all stories on this topic »

How IT pros can control their private cloud computing destiny TechTarget Private cloud computing makes sense for some, but not all, organizations. Companies with security and privacy concerns, for example -- particularly concerns that relate to sensitive workloads or government regulatory and/or compliance requirements ... See all stories on this topic »

EESC puts forward alternative EU cloud strategy ComputerWeekly.com The European Commission's (EC) cloud computing strategy fails to spur the development of cloud services and the emergence of European cloud computing infrastructure, the European Economic and Social Committee (EESC) has warned. Members of the ... See all stories on this topic »

UK Data Center Colocation Business Growing InformationWeek U.K. Trade & Investment claims that the annual market value of the U.K.'s cloud computing market will grow from £2.4 billion to £6.1 billion by 2014 (equivalent to $9.8 billion), and that by 2015 half of all new IT spending by the public sector will be ... See all stories on this topic »

HP's Head of Cloud Computing Zorawar "Biri" Singh Departs All Things Digital ejection_seat Word has just leaked out of Hewlett-Packard that Zorawar “Biri” Singh, senior vice president and general manager for Cloud Services, is leaving the company. Roger Levy, the group's vice president for technology and customer relations ... See all stories on this topic »

"Data will be the new cloud computing oil” in 2013, says Ovum CIOL Finally, 2013 Trends to Watch: Cloud Computing*** report, looks at the way cloud service providers and consumers adapt to cloud computing both on their own and as part of increasingly sophisticated cloud ecosystems. In the "2013 Trends to Watch: Cloud ... See all stories on this topic »

4 Big Cloud Computing Trends For 2013 Information Management What will happen in cloud computing in 2013? Henrik Rosendahl, senior vice president of cloud solutions at Quantum – a maker of data management, backup and recovery products – recently weighed in with some thoughts on a number of trends to watch. See all stories on this topic »

Symantec Survey: Poorly Planned Cloud Move Can Be Costly Talkin' Cloud Cloud, of course, can do all that—and more (okay, except make my coffee; there needs to be an app for that). According to a recent Symantec (NASDAQ: SYMC) survey, though, poor planning can negate many of the cost benefits of cloud computing and ... See all stories on this topic »

Open Compute Summit: New Members, Technologies Talkin' Cloud There has been a bit of buzz about some of the innovations unveiled at the show, and this can only mean good things for the open source cloud computing market. Some of the interesting launches at the conference included a new rack design from Quanta in ... See all stories on this topic »

Kingfisher Airlines Ltd Default : DVB Says India Plane Lease Costs to Rise on Kingfisher Airlines Ltd Default

DVB Says India Plane Lease Costs to Rise on Kingfisher Airlines Ltd Default

Jet Airways (India) Ltd. (JETIN) and rival carriers in the nation face rising aircraft financing costs after Kingfisher Airlines Ltd. defaulted on leases and Indian authorities failed to help recover the planes, DVB (DVB) Bank SE said.

“Risk is perhaps higher than we thought,” Bertrand Grabowski, managing director for aviation and rail at the Frankfurt-based bank, said in an interview in Singapore today. “If someone is willing to do aircraft financing in India, costs will move up,” he said without specifying any rates.

DVB Bank hasn’t been able to place with other carriers the two Airbus SAS A320s it repossessed from Kingfisher as India’s aviation regulator refused to deregister the jets, Grabowski said. The lender suspended all financing to Indian carriers because of the situation, he said.

Kingfisher (KAIR), the only Indian carrier to order Airbus A380s, has grounded planes since October after five straight years of losses. The carrier lost its operating license on Jan. 1 after failing to convince Indian authorities it has enough funds to revive operations.

DVB has parked the two jets it repossessed from Kingfisher in Turkey for the past 3-4 months, Grabowski said. India’s Directorate General of Civil Aviation hasn’t given a reason for not allowing the deregistration, he said.

The nation’s airlines rely on financing from foreign banks for purchase and lease of aircraft, said Praveen Sahay, a Mumbai-based analyst at Batlivala & Karani Securities India Pvt. The cost of such funding is in the range of 5 percent to 6 percent, he said.

Risk Premium
“It’s possible that leasing costs will rise,” said Binit Somaia, a Sydney-based director at CAPA Centre for Aviation. “The lessors and financiers will attach a higher risk premium to the Indian market if there are concerns they can’t recover their assets in the event of a default.”

The Delhi High Court will hear on April 8 DVB Bank’s lawsuit against the Indian aviation regulator on deregistering the two Kingfisher aircraft, according to the court’s website.

Arun Mishra, who heads New Delhi-based DGCA, said Dec. 21 the regulator would withhold the deregistration and export certificate for the planes until a court decision. Mishra didn’t immediately respond to a call and a text message to his mobile phone today.

India’s aviation ministry estimates that the nation’s carriers are expected to add about 370 aircraft by the year ending March 31, 2017. The fleet size would reach 1,000 by 2020 from 400 last year, according to the ministry.

DVB has about $450 million of direct and indirect financing to state-owned Air India Ltd., discount carrier IndiGo and Jet Airways, Grabowski said. After Kingfisher’s defaults, two banks decided to discontinue financing to the Indian aviation market, he said without naming the lenders.

“The Kingfisher story has been a kind of trauma for many banks,” Grabowski said. “The concern is not just for DVB, it’s an industry concern.”

Kingfisher’s A380 order still active

Airbus, which said the A380’s order book comprises 262 firm orders from 20 customers, acknowledged India’s Kingfisher Airlines order for five of the type “looks shaky.”  Kingfisher has ceased operations and its aircraft have been impounded.

“I have legally binding contracts with Kingfisher right now. We got deposits, we rescheduled the aircraft and it is probable at some point we will take the orders out,” COO-Customers John Leahy told ATW, adding that it hopes the troubled carrier gets new investors. “We certainly don’t want to get out [of this contract]. It is a good customer, operates an all-Airbus fleet. I don’t see a reason to give up [yet],” Leahy said.

According to the manufacturer, 97 A380s are in service with nine airlines.

Banks ask airline to clear some dues before they consider any further loan ... Livemint Mumbai: A core group of lenders asked grounded Kingfisher Airlines Ltd to infuse at least Rs.800 crore into the carrier before the banks considered any further loan recast and the extension of a no-objection certificate (NOC) that would enable the ... See all stories on this topic » Livemint

Leahy: Kingfisher's A380 order still active ATWOnline Airbus, which said the A380's order book comprises 262 firm orders from 20 customers, acknowledged India's Kingfisher Airlines order for five of the type “looks shaky.” Kingfisher has ceased operations and its aircraft have been impounded. “I have ... See all stories on this topic »

Kingfisher, bankers meet inconclusive Hindu Business Line Lenders want the beleaguered Kingfisher Airlines to clear a part of its overdues before considering any support for its revival plan. The airline owes about Rs 7,500 crore to a consortium of banks led by State Bank of India. Of this overdue, loan ... See all stories on this topic » Hindu Business Line

DVB Says India Plane Lease Costs to Rise on Kingfisher Default Bloomberg Jet Airways (India) Ltd. (JETIN) and rival carriers in the nation face rising aircraft financing costs afterKingfisher Airlines Ltd. defaulted on leases and Indian authorities failed to help recover the planes, DVB (DVB) Bank SE said. “Risk is perhaps ... See all stories on this topic »

Kingfisher bosses to step up plans following bad week for Redditch Standard PLANS to improve the Kingfisher Shopping Centre will be stepped up in the light of Jessops' closure and the potential loss of HMV. The sudden closure of camera chain Jessops last Friday (January 11) has increased the number of empty units within the ... See all stories on this topic » Redditch Standard

MARKET REPORT: B&Q owner Kingfisher left out in the cold This is Money Kingfisher followers were also disappointed to hear recently about the resignation of Euan Sutherland, who was viewed as a credible successor to boss Ian Cheshire. He leaves in March to become chief executive of the Co-operative Group, where he has ... See all stories on this topic » This is Money

Director Deals - Kingfisher PLC (KGF) Stock Market Wire Director Deals - Kingfisher PLC (KGF). 18 January 2013 | 15:25pm. StockMarketWire.com - Clare Chapman, Non Executive Director, bought 6,990 shares in the company on the 17th January 2013 at a price of 285.60p. The Director now holds 6,990 shares ... See all stories on this topic »

Kingfisher’s A380 order still active

Airbus, which said the A380’s order book comprises 262 firm orders from 20 customers, acknowledged India’s Kingfisher Airlines order for five of the type “looks shaky.”  Kingfisher has ceased operations and its aircraft have been impounded.

“I have legally binding contracts with Kingfisher right now. We got deposits, we rescheduled the aircraft and it is probable at some point we will take the orders out,” COO-Customers John Leahy told ATW, adding that it hopes the troubled carrier gets new investors. “We certainly don’t want to get out [of this contract]. It is a good customer, operates an all-Airbus fleet. I don’t see a reason to give up [yet],” Leahy said.

According to the manufacturer, 97 A380s are in service with nine airlines.

Capt John Ardoyno and Prof William Shaun Jackson Crashed on the New College of Florida campus, shortly after leaving the Sarasota-Bradenton International Airport.

2nd death from plane crash near New College

Authorities say 70-year-old John Ardoyno of Hayward, Wis., was killed in Saturday's crash. Sixty-three-year-old William Shaun Jackson of Ann Arbor was badly burned and died Tuesday.

A University of Michigan professor of art and design has died of burns he received in the crash of a seaplane in Florida in which the pilot also died.

The plane crashed Saturday on the New College of Florida campus, shortly after leaving the Sarasota-Bradenton International Airport.

Authorities say 70-year-old John Ardoyno of Hayward, Wis., was killed in Saturday's crash. Sixty-three-year-old William Shaun Jackson of Ann Arbor was badly burned and died Tuesday.

The Sarasota County Fire Department says the seaplane crashed as Ardoyno tried to take off from the Airport. Pearson says the plane failed to gain enough altitude.

Police chief: 'If you had to have a plane crash, this is the place to do it' The Star-Ledger - NJ.com BURLINGTON. N.C. — Investigators remained Thursday at the ball field where a New Jersey-boundplane crashed the day before, killing the pilot. The plane and heavy debris remained at the Mayco Bigelow Community Center on Sharpe Road in Burlington, ... See all stories on this topic »

We now know more about the plane crash that killed a Niceville family in July ... WEAR The NTSB says while engine failure contributed to the crash, the ultimate cause was pilot error, because Teutenberg was not able to control and safely land the plane on a single engine. Report released on 2011 plane crash that killed Niceville family ... See all stories on this topic » WEAR

Plane crash in southern Mexico kills 8: Officials Press TV Eight people have been killed when a small airplane crashed seconds after it took off from an airport in the southern Mexican state of Chiapas, officials say. The privateairplane crashed on Thursday shortly after takeoff from Angel Albino Corzo ... See all stories on this topic » Press TV

2nd death from plane crash near New College Sarasota Herald-Tribune The plane crashed Saturday on the New College of Florida campus, shortly after leaving the Sarasota-Bradenton International Airport. Authorities say 70-year-old John Ardoyno of Hayward, Wis., was killed in Saturday's crash. Sixty-three-year-old William ... See all stories on this topic »

Family of Co-Pilot in Rivera Plane Crash to Fight Back KIII TV3 The family of one of the co-pilots of late Latin singer, Jenni Rivera, has hired a local attorney to investigate the plane crash that killed the singer and six others. Craig Sico of Sico, White, Hoelscher, Harris and Braugh, who specialize in aviation ... See all stories on this topic »

2 fatal Ga. aircraft crashed linked to pilot error News & Observer The Telegraph of Macon ( http://bit.ly/WbUhUa) reports pilots were found to be at fault in a fatal smallplane crash in January 2012 and a hot-air balloon crash in March 2012. Former Coliseum Health System CEO Allen Golson and his wife flew from Macon ... See all stories on this topic »

8 Die in Mexico plane crash La prensa Eight people, three of them children, were killed Thursday when a small plane crashed just seconds after it took off from an airport in the southern Mexican state of Chiapas, authorities told Efe. EFE/File. Mexico City, Jan 17 (EFE).- Eight people ... See all stories on this topic » La prensa

Services Begin for Area Men Killed in Plane Crash stjoechannel.com ... for three area men killed in a Nebraska plane crash last week begin today. Jason Drane, 39, of St. Joseph; Mark Bottorff, 54, of Lancaster; and Ken Babcock, 71, of Hiawatha all died when a plane Bottorff was piloting crashed near Maxwell, Neb ... See all stories on this topic »

Kingfisher Airlines got NOC ? Ready to Fly again ??

Kingfisher Airlines Ltd will need to convince the Directorate General of Civil Aviation on the defunct Airline’s funding plans and the payment of salaries to employees before it is likely to be allowed to take to the skies again.

This emerged at a meeting that the airline Chief Executive Officer Sanjay Agarwal had with Director General of Civil Aviation Arun Mishra here on Wednesday. Agarwal declined to talk to the media after the meeting.

Sources indicated that at the meeting the DGCA was shown evidence in terms of No Objection Certificate (NoC) from fuel companies, lessors, some maintenance repair and overhaul facilities and even Airbus (which said that it was ready to provide support for aircraft).

Mishra was informed that the promoters are working out how to settle their debts and are talking to investors. No details of the investors were, however, made available at the meeting. There was no mention of the UB Group providing funds for the airline to get air borne again. The listed Kingfisher Airlines is part of the UB Group.

The airline, however, has not yet been able to get an NoC from airport operators. The airline owes over Rs 250 crore to the state-owned Airports Authority of India alone.

Kingfisher expressed the hope that it would be able to restart operations during the summer schedule. Globally, the summer schedule of airlines starts in March and ends in October. The airline suspended operations on October 1, 2012 and its licence was suspended on December 31, 2012.

“They have said this is an interim briefing. Initially the airline plans to start operations with five Airbus 320 and two ATR aircraft,” sources said.

Incidentally, the Airline promoter and Member of Parliament, Dr Vijay Mallya, in a recent communication to employees, had indicated that Kingfisher Airlines would take to the skies in a phased manner during the summer schedule.

 A section of Kingfisher Airlines Ltd’s employees has planned a hunger strike from 21 January demanding salaries unpaid since June, two employee representatives said.

Another group is planning legal action seeking closure of the airline, while a third is demanding a meeting with the chairman and promoter Vijay Mallya ahead of his meeting with lenders on 18 January.

Kingfisher’s operating licence was suspended in October by the Directorate General of Civil Aviation, India’s aviation regulator, following a strike by the airline’s employees. The licence has since expired.

“We have met Kingfisher Airlines’ executive vice-president Hitesh Patel on Monday and sought a meeting with Mallya before 18 January,” said a senior Kingfisher Airline Pilot, requesting anonymity. “We are fed up and we need to know what is happening. If possible, we also wanted to meet lenders to know whether there is hope left for us.”

Dr Mallya in a presentation made last year to lenders had said Kingfisher would resume operations with seven aircraft and increase it to 21 in four months. At its peak, Kingfisher Airlines was flying 66 planes to 68 locations, including eight international destinations, with 374 flights a day, and accounted for 20% of the market.

And in a 10 January letter to employees, Mallya reassured employees that the airline would begin flying by summer with a Rs.650 crore infusion from the parent UB Group.
“The limited restart plan, which we target for the beginning of the 2013 summer schedule, requires funding of approximately Rs.650 crore, which is committed to be provided by the UB Group and associates,” Mallya said in the letter to Kingfisher employees.
Analysts have previously said the grounded airline needs between Rs.3,000 crore and Rs.5,000 crore to fly again—in any meaningful way.
Shares of Kingfisher Airlines were trading 1.46% lower at Rs.14.18 in morning trade on BSE Ltd, while the Sensex was 0.07% higher at 19,920.84 points on Tuesday.

One day in the last week of December, Vijay Mallya , the flamboyant chairman of the UB Group, met bankers at a south Mumbai hotel.
Mallya—known as much for his love of the good life and the popular Kingfisher calendar as for Kingfisher beer, India’s largest selling brew, and the grounded Kingfisher Airlines Ltd—was accompanied by Sanjay Aggarwal, chief executive of the airline; Ravi Nedungadi, president and chief financial officer of the group; and A. Harish Bhat, deputy president, corporate finance.
The always-articulate Mallya made a PowerPoint presentation in which he meticulously charted the future of the airline, the licence of which was suspended in October by the Directorate General of Civil Aviation (DGCA), India’s aviation regulator, following a strike by the airline’s employees. The airline’s operating licence has since expired.
According to the proposal presented by Mallya—based on a revival plan submitted by the airline to DGCA—Kingfisher would restart operations with seven aircraft and increase it to 21 in four months. At its peak, Kingfisher Airlines was flying 66 planes to 68 locations, including eight international destinations, with 374 flights a day, and accounted for 20% of the market.
Mallya’s audience—representatives of a consortium of 14 banks that have a Rs.7,000 crore exposure to the troubled airline—gave him a patient hearing. At the end of it, one of them asked Mallya a question: what’s in it for the lenders? Mallya didn’t have an answer.
Still, the meeting wasn’t entirely unproductive. It ended with the formation of a core group to assess the airline’s proposal to restart operations and identify ways for lenders to recover their money. The members of the core group are State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Bank of India, IDBI Bank Ltd and United Bank of India.
The group met in Bangalore on 4 January but made no headway. With Diageo Plc of the UK buying a 27.4% stake in UB Group company United Spirits Ltd for £660 million (this will be followed by an open offer to buy another 26% from the public shareholders of United Spirits), the bankers went into that meeting hoping Mallya would come up with a concrete plan to take care of their interests.
Their belief was strengthened by an offering Mallya made on 18 December, his birthday, at Hindu god Venkateswara’s shrine in Tirupati in Andhra Pradesh—3kg of gold worth close to Rs.1 crore.
But Mallya did not oblige.

Lenders’ largesse
The core group will meet again in Mumbai on 18 January, possibly to take a final call on the money owed by Kingfisher Airlines—arguably the most high-profile bad asset Indian banks have ever had on their books.
The banks can’t be blamed; if anything, they have been far too patient and much too generous.
They first restructured Kingfisher’s debt in November 2010. To infuse life into the airline, ailing even then, banks in the consortium converted Rs.1,355 crore of debt into equity, at a 61.6% premium to the market price of Kingfisher Airlines’ stock. Following this, banks own 23.21% of the airline’s equity. The promoter, too, converted Rs.648 crore of debt into equity. Apart from this, the bankers also stretched the period of repayment of loans to nine years with a two-year moratorium, cut the interest rates, and sanctioned a fresh loan.
The idea was to bring down the debt of the airline, push up its equity-debt ratio, and improve its cash flow. Since its inception in 2005, Kingfisher has never returned a net profit. And its losses zoomed after it acquired low-cost airline Deccan Aviation Ltd in 2007. Between fiscal 2008-09 and September 2012, its accumulated losses reached Rs.8,015.8 crore.
The bankers agreed to throw good money after bad money in the belief that this would improve the health of the airline and ultimately help them recover their dues. Now, they regret it.
Interestingly, some of them admit there were more than just commercial interests at play in their generosity. In private, some bankers hint at pressure from certain quarters to restructure the loan. Mallya has been a member of the Rajya Sabha, the Upper House of India’s Parliament, since 2002.
Still, whatever forces may have been at work, the bankers insisted on a safety net.
Since most airlines lease aircraft, banks do not get planes as primary security for loans given to airlines. So what do the bankers have as collateral? They took fresh collateral from Mallya during the restructuring—two properties in Mumbai and Goa worth Rs.70 crore, two helicopters worth Rs.84 crore, and shares of United Spirits and Mangalore Chemicals and Fertilizers Ltd worth Rs.450 crore at current market prices. They also took the first charge on fixed assets such as coaches that ferry passengers to the tarmac and tractors, worth Rs.150 crore. In case of a default, lenders with a first charge have the option to seize the assets.
The banks also received a corporate guarantee from United Breweries Holdings Ltd, the holding company of the group, and a personal guarantee from Mallya. Finally, they also took as collateral the Kingfisher brand, valued at Rs.3,000 crore by audit firm Grant Thornton India.
Personal guarantee
In an indication of the kind of sway he once exerted over the bankers, Mallya charged the banks Rs.98 crore for offering a personal guarantee. Once the banking regulator Reserve Bank of India (RBI) got to know of this, it asked the banks to recover the money. The amount was initially debited from Kingfisher Airlines’ liability to banks in its 2010-11 profit and loss account, but the next year the entry was reversed, thus doing away with the fee. Now, the banks seem determined to take their dealings with the airline to their logical end—one that could well mean the end of the airline, too.
Mallya is willing to bring in money to make the airline operational and have a limited restart in the summer of 2013. In a 10 January letter to employees, he promised to infuse Rs.650 crore to do this. The money will come from the UB Group and its associates. Among Kingfisher’s dues are unpaid salaries, and payments to oil marketing companies and private and public airport operators, and the Rs.650 crore will be used to meet these obligations, at least partially.
The banks are unlikely to allow this to happen. They want around Rs.800 crore on the table for themselves—half of which is technically called an “irregular amount”, or the dues not paid. This means Mallya would need to bring in at least Rs.1,450 crore to restart operations (that is if Rs.650 crore is enough to take care of other obligations at this point).
If indeed he does that, technically the banks will have scope to restructure the account once again—this is within the realm of the possible—through the so-called corporate debt restructuring (CDR) route. If Mallya does not bring in the money for the lenders, he won’t be able to restart the airline because the aviation regulator, DGCA, will seek a no-objection note from banks and that might not be forthcoming.
The banks can afford to be aggressive as they have nothing to lose. Technically, the Kingfisher debt account turned bad in 2009 even before the first restructuring happened. This is because when a restructured loan turns bad, RBI norms mandate that the lenders backdate it to the time before the restructuring exercise was taken up. Most banks have already set aside money to cover the bad loan, and every rupee recovered from Kingfisher will add to their profits.
SBI, the leader of the consortium, has the maximum exposure at Rs.1,600 crore, followed by PNB (Rs.800 crore), IDBI Bank (Rs.800 crore), Bank of India (Rs.650 crore), Bank of Baroda (Rs.550 crore), United Bank of India (Rs.430 crore), Central Bank of India (Rs.410 crore), Uco Bank (Rs.320 crore), Corporation Bank (Rs.310 crore), State Bank of Mysore, an SBI associate bank (Rs.150 crore), Indian Overseas Bank (Rs.140 crore), Federal Bank Ltd (Rs.90 crore), Punjab and Sind Bank (Rs.60 crore) and Axis Bank Ltd (Rs.50 crore). Overall, their exposure is Rs.6,360 crore, and once the unapplied interest is added, it becomes Rs.7,000 crore.
There are other lenders outside the consortium. They are Srei Infrastructure Finance Ltd (Rs.430 crore), Jammu and Kashmir Bank Ltd (Rs.80 crore) and Oriental Bank of Commerce (Rs.50 crore).
A debt fund operated by Kolkata-based Srei Infrastructure Finance bought ICICI Bank Ltd’s exposure to the airline in July 2012. The non-banking financial company and Jammu and Kashmir Bank has shares of United Spirits and McDowell Holdings Ltd as collateral. The current market value of these shares is about Rs.350 crore—more than their exposure. The consortium has an arrangement with these two entities to get hold of the additional shares and sell them to recover their dues.
Recalling the loan
At least one lender claims to have sent a recall notice to the company some time back, but claims it could not follow up because of pressure from a certain quarter. A senior executive of the bank said he received a call from a bureaucrat from Delhi asking him to follow the leader of the consortium and not to do anything outside that.
But things have changed in the Capital as well, and it now looks like there will not be any pressure from any quarter and banks can chart out their course.
What can they do?
They can move for liquidation of Kingfisher. And for this, they do not need to take legal recourse. Under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, secured creditors can move a debt recovery tribunal to recover their money.
A sale of the Mumbai and Goa properties, two helicopters, other fixed assets and shares of UB Group companies can generate around Rs.1,000 crore, roughly 15% of the money that Mallya owes banks.
By virtue of holding the Kingfisher brand as collateral, the banks can prevent United Breweries from using it for its beer, which is sold in 52 markets and accounts for more than one-third of the Indian beer market. And if indeed the banks become aggressive—as they are planning to be—Mallya will have to stop printing the Kingfisher calendar, too, a prestigious project since 2003 in which ace photographer Atul Kasbekar shoots models and film actors on the beaches of Mauritius, the Maldives and the French Riviera.
The corporate guarantee of United Breweries Holdings will also come in handy.
Finally, the banks can play havoc with Mallya’s personal guarantee by seizing all his assets. If Mallya transfers his personal assets to others in his family for fear of losing them to the banks, the banks can move criminal proceedings against him.
As if these are not enough, if banks choose to declare Mallya as a “wilful defaulter”, none of his group companies will be able to access bank funding.
All this is in theory, and I am not convinced the banks will be able to stick to their guns, but at this point, one thing is certain—they are fast losing their patience. With no pressure from other quarters to throw another lifeline to the airline, they are expected to firm up a plan of action by the end of January and start executing it before the fiscal year ends in March.
Their position will change if Mallya is able to offer money to them in addition to generating funds that he needs to make the airline operational in a modest way.
If he fails, banks can remove him from the cockpit and hijack his entire empire. They are not as vulnerable as they seem to be.

Kingfisher-lenders meet today on debt repayment and revival plan Business Standard Yesterday, Kingfisher got No-Objection Certificates (NOCs) from oil companies and leasers to start operations. However, it is yet to get NOCs from the banks, airport operators, Airport Authority of India ( AAI) and Director General of Civil Aviation ... See all stories on this topic »

Kingfisher R 264 cr TDS case to be heard on Jan 21 Daily Bhaskar New Delhi: Kingfisher Airlines has approached the Supreme Court (SC) to hear their plea against a Karnataka Court which had ordered the ailing airliner, to deposit 50% of the income tax demanded by the department, and also provide a bank gurantee of ... See all stories on this topic »

Bankers to meet Kingfisher officials on Friday Hindu Business Line A core group of bankers will meet Kingfisher Airlines' officials on Friday to consider the way forward on their Rs 7,500-crore exposure to the beleaguered airlines. The moot question is whether the airline can be revived or they should proceed with ... See all stories on this topic »

Kingfisher Airlines shows NoC from vendors to restart operations Hindu Business Line Kingfisher expressed the hope that it would be able to restart operations during the summer schedule. Globally, the summer schedule of airlines starts in March and ends in October. The airline suspended operations on October 1, 2012 and its licence was ... See all stories on this topic »