Troubled Indian carrier Kingfisher Airlines is looking at ways of cutting its debts by around 50 per cent. Proposals include selling off property, converting loans to equity and reassessing the terms of its aircraft leasing. Creditors have requested that Kingfisher raise £100 million in equity in order to restructure debts. However, before any restructuring is allowed to go ahead, Hemant Contractor, managing director of the State Bank of India, said the company would have to present a viable business plan.

Kingfisher is India’s second largest airline, and presently owes around $1.2 billion. As its stock value recently fell by 18 per cent before rallying slightly, the company has also cancelled a number of flights. If the airline can come up with a decent business plan, the banks may be willing to deliver the loans the airline needs to continue its operations.

Vijay Mallya, the carrier’s part-owner and founder, has said that the airline is not about to shut down because losses are being stemmed by rationalising flights. Analysts say that the carrier has been a victim of the price war between Indian carriers, and the steep price of oil.

With a 14 billion rupee debt exposure, the State Bank of India is Kingfisher’s largest lender. Selling shares and assets have been some of the options discussed for dealing with the debt issue.

Last week the carrier said it would be cutting its operations from 340 to 300 per day. The company was set up in 2005, and has never managed to post an annual profit.