Govt defends state-run banks' exposure to Kingfisher Airlines | india | Hindustan Times
Today in New Delhi, India
Apr 27, 2017-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Govt defends state-run banks' exposure to Kingfisher Airlines

The government today defended state-run lenders' exposure to debt-ridden Kingfisher Airlines and said that loans worth Rs 6,419 crore to the debt-ridden air carrier were not over-valued.

india Updated: Dec 13, 2011 15:12 IST

The government on Tuesday defended state-run lenders' exposure to debt-ridden Kingfisher Airlines and said that loans worth Rs 6,419 crore to the debt-ridden air carrier were not over-valued.

To a query in Rajya Sabha on whether banks had bought the airlines' shares for 260% more than the market prices, minister of state for finance Namo Narain Meena said, "There was no overvaluation to accommodate the airline."

He said public sector banks have an exposure of Rs 5,792.66 crore to the airline by way of fund-based limits and non-fund based limits and Rs 1,109.20 crore through investment in cumulative redeemable preference shares (CRPS) and non-convertible cumulative redeemable preference shares (NCRPS).

He further elaborated that as per the "Master Debt Recast Arrangement (MRDA), a portion of the debt was carved out and issued as CRPS, which was subsequently converted into equity shares of Kingfisher Airlines at a price of Rs 64.48 per share on March 31, 2011, as against the prevailing market price of Rs 39.90 per share.

Public sector banks were allotted 11,63,30,639 shares in the company on conversion on March 31, 2011.

He added the total investment by banks in the company's equity shares was Rs 750.10 crore. "The market value of equity shares held by banks in Kingfisher Airlines as on December 7, 2011, is valued at Rs 298.39 crore."

Is Your Couch Making You Cough?
Promotional Feature