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Mumbai: Vijay Mallya, the flamboyant owner of the United Breweries group and the troubled Kingfisher Airlines,

is open to constructive criticism. He is willing to take suggestions from lenders on possible management or board changes to revive the flagging airline. He is also talking to potential strategic and non-strategic investors and looking forward to the government notification on allowing foreign airlines to buy an up to 49 per cent stake in domestic airlines.

He wrote to the airlines' employees on Monday that junior staff would be paid salaries on 4 April 2012 and pilots on 9 April. Engineers will be paid on 10 April. He told the staff in an email that the companys bank accounts were unfrozen after paying Rs. 44 crore to the income tax department and Rs.20 crore to the service tax department.

Kingfisher last Tuesday said that it temporarily stopped operations to several destinations as per its revised flight schedule, and most employees at those places have been asked to "stay at home." The company called it a holding plan ahead of recapitalization.

Vijay Mallya sent an email response to NDTV queries recently.

Here are excerpts from the exclusive interaction:

Despite its posh brand, Vijay Mallyas Kingfisher Airlines is unraveling faster than a cheap woolen sweater. But not fast enough it may seem. At a meeting today at SBIs Mumbai headquarters, the group of lenders led by SBI turned the screws on Mallya, by saying they would take charge of Kingfisher House, his office building. Yet again, they stopped short of doing what they should have done long ago- throwing him out and pushing for a change of management to help the airline survive. The biggest reason for Kingfisher Airlines decline is clearly Mallyas hubris and wrong management calls at every step of the airlines seven year existence. The beer-baron has never brought in professionals to run the carrier- even the CEOs he hired like Nigel Harwood (who came from Airbus) or more recently Sanjay Aggarwal (from SpiceJet), are never allowed to take their own decisions. KFA has been micro-managed by Mallya. It has also never made a single rupee of profit. He got the model wrong, the equipment wrong and the strategy wrong- sealing the airlines fate in times that were tough for even the best run carriers. Airline bankruptcies are a common occurrence the world over. The last few weeks have seen hoary Hungarian carrier Malev go under as did Air Finland, Skyway, Cirrus and Danish carrier Climber Sterling. Many others, notably United Airlines and America West, have survived after restructuring to fight another decade. But this is largely because of Chapter 11 protection that the US banking system allows. When they do revive- it has often meant a complete change in management and operating methods. The hole that Kingfisher is in is much larger than the airlines that went bust in May this year. If Kingfisher goes under- rather, if it is allowed to- it will be by far the biggest bankruptcy in corporate India. In most countries, this would have been reason enough for bankers to get in someone who can cut the mustard. Not here for sure. Banks have traditionally chosen to give promoters a long rope. To hang themselves with- it would seem in this case. Bankers speaking off the record, say their experience with loss-making Indian companies in the past decade is that they come out of it- eventually. Liquidating assets does not help anyone, they say citing the example of Ispat, Essar Oil and Dabhol Power company. All three eventually began paying back their loans.

But does this theory work for an airline company? Unlike the steel companies, Kingfisher Airlines has few assets. The aircraft, engines, spares, offices are all leased. The slot, brand and people are intangible assets that are difficult to monetize. The Kingfisher brand is one of the assets hypothecated for the loans- but bankers are not very sure what they will do with it. Also, it could never get its model right. Mallya is on our cover in the issue that hits the stands this weekend. Read more about the Entrepreneur on the Rocks there.

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MUMBAI: Inefficiently-handled Kingfisher Airlines would be to do little with the recent succour of Rs60 crore from banks. This help provided by banks would not resolve the issue at hand: nonpayment of salary of employees. It is perceived that the company has not paid its employees for seven months. An analysis of employee expenses of the airline suggests that the average employee expense in the last eight and twelve quarters are over Rs100 crore.

United Breweries (UB) group stocks were, on Friday, bearhammered as the revival of Kingfisher Airlines came under a cloud after banks refused to give a lifeline. The lack of clarity on the United Sprits-Diageo deal, and the downgrading of United Sprits loan by credit rating agency ICRA to junk caused negative sentiment resulting in the sell-off. United Sprits plunged by 4.61 per cent to close at Rs.1,218, while United Breweries closed with a loss of 7.59 per cent at Rs.653.10 on the Bombay Stock Exchange (BSE). United Breweries Holding lost 8.35 per cent in value to close at Rs.133.85. Following high volatility of this stock, the BSE had, on Thursday, reduced the circuit limit to 10 per cent from 20 per cent earlier. The Kingfisher Airlines stock has also been put under a 5 per cent circuit limit to prevent high fluctuation. The stock, on Friday, plunged 4.95 per cent and got locked in the lower circuit filter at Rs.16.12. Without the circuit filter, the stock could have fallen much below. The Kingfisher stock was on a rise in the last few sessions with the hope that the airline would be revived with funds coming in from foreign airlines which are now allowed by the Union Government to invest in Indian carriers. Speculations over global spirits company Diageo acquiring controlling stake in United Spirits and the proceeds being canalised to revive Kingfisher Airlines also gave mussels to

the battered stock. Now that UB Group Chairman Vijaya Mallya has reportedly denied any move to utilise United Spirits money to revive the ailing Kingfisher, the stock is finding its own level.