Advertisement

HindustanTimes Sat,19 Apr 2014

Kingfisher: banks mull selling UB shares as first step

HT Correspondents, Hindustan Times  Mumbai/New Delhi, February 13, 2013
First Published: 21:33 IST(13/2/2013) | Last Updated: 22:50 IST(13/2/2013)

Lenders to debt-ridden Kingfisher Airlines will consider selling shares of UB Group companies, pledged to an SBI-led consortium of 17 lenders that have a combined exposure of Rs. 7,000 crore, as a first step towards recovering their money.

Advertisement

Shares of Kingfisher on Wednesday plunged 5% to close at Rs. 10.6 on the Bombay Stock Exchange after lenders decided to start the recovery process following the KFA management’s failure to come up with a feasible plan to restart operations.

“We have shares pledged to the consortium of United Spirits. We also have some shares of Mangalore Chemicals and Fertilisers. These shares are low-hanging fruits. So, this should be the first line for us to recover the money,” said Shyamal Acharya, deputy managing director, SBI. “We expect some realisation at least from the sale of shares during this quarter itself.

Kingfisher Airlines CEO Sanjay Agarwal did not take calls or reply to messages sent by HT. The airline’s official spokesperson, too, declined too comment.

http://www.hindustantimes.com/Images/Popup/2013/2/14-02-13-biz-01b.jpg

Meanwhile, aviation minister Ajit Singh made it clear that Kingfisher will not be allowed to fly unless the Directorate General of Civil Aviation was fully satisfied that the airline was capable of running smooth and safe operations.

“Unless the DGCA is satisfied that Kingfisher can offer safe and viable service with enough funds, it cannot be allowed to fly,” said Singh. “We have no role in it. What happens to loans is their (Kingfisher’s) business.”

Bankers have formed a group to decide on the future course of action regarding the recovery.

“A small group of lenders have been constituted who will look into all these aspects for sending the call up notice and to see how fast some of the securities can be realised including United Spirits,” said Acharya.

Total value of collateral kept with bankers, excluding the value of Kingfisher brand, is pegged at Rs. 6,500 crore.

Apart from shares of United Spirits and Mangalore Chemicals and Fertilisers, the airline has put up several real estate assets — including its office in Mumbai — and its brand — as collateral against loans.

Advertisement
more from Aviation

Airbus A350 'performing extremely well' in flight: pilot

The first test flight of Airbus's next-generation A350 plane was going smoothly and the aircraft was "performing extremely well", its pilot said today, two hours after take-off.
markets
Advertisement
Most Popular
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved