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KFA lenders to meet soon to decide next step

KFA's bankers, which have over Rs 7,500 cr locked in the ailing airline, will soon meet to chart out the future course of action, said PNB chairman and managing director KR Kamath. Striking staff reject Kingfisher offer

india Updated: Oct 23, 2012 18:25 IST

Kingfisher's bankers, which have over Rs 7,500 crore locked in the ailing airline, will soon meet to chart out the future course of action, said PNB chairman and managing director KR Kamath.

"The bankers will sit and decide what is the situation now and what they will do," Kamath said in New Delhi.

Punjab National Bank (PNB) is part of the SBI-led consortium of 17 banks that has exposure in the cash-strapped airline.

"The leader (State Bank of India) will convene the meeting," Kamath said.

Last week, the Directorate General of Civil Aviation (DGCA) suspended licence of beleaguered airline following its failure to come up with a viable plan for financial and operational revival.

The liquor baron Vijay Mallya-promoted carrier has been saddled with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of which it has not serviced since January. The airline currently has only 10 operational aircraft compared to 66 a year ago.

In November 2010, the banks had restructured Kingfisher loans worth Rs 6,500 crore.

The airline is under a lockout since October one and resultant suspension of entire operations.

The airline has suffered losses of Rs 1,609 crore in 2008-09, Rs 1,647 crore in 2009-10, Rs 1,027 crore in 2010-11 and Rs 732 crore in 2011-12.

Kingfisher was issued an airline licence on August 26, 2003. It was actually issued to Air Deccan which was bought over by Kingfisher. It is valid till December 31 this year.

Investors on a buying spree

Overseas investors as well as small individuals and HNIs seem to be on a share buying spree in Kingfisher Airlines, even as questions are being raised about resumption of its operations after the licence was suspended.

The Foreign Institutional Investors (FII) have more than doubled their holding to 2.46% stake in Vijay Mallya-led UB group's Kingfisher Airlines, while small individual shareholders hiked their holding significantly to 17.59% during the quarter ended September 30.

The HNIs (high-networth individuals) also raised their holding to 13.78% from 8.45% in June quarter.

FII holdings in the airline rose to 2.46% in the July-September quarter from 0.98% in the previous three months, as per stock exchanges data.

The holding of small investors (defined as those holding up to Rs one lakh worth shares in a company) has grown by 3.81 percentage points, while that of HNIs (individuals with shares worth over Rs one lakh) has risen by 4.59 percentage points.

Besides, the latest shareholding data of Kingfisher shows that the numbers of small individual and HNI shareholders have increased considerably during this time.

On the other hand, the total promoter holding has dipped to 35.83% from 35.86% in June quarter.

The promoters have pledged over 90% of their shares with various lenders, leaving them with a non-encumbered stake of just 3.55%.

The shareholding of institutional investors (insurance, banks and financial institutions) has also come down in the recent quarters and fell to 15.60%, from 14.18% as on June 30, 2012.

The stake of domestic institutional investors slipped marginally to 13.14% in September quarter from 13.20% in the preceding three months.

Besides, shares have dived more than 30 per cent since Kingfisher has been grounded.

The total number of HNI shareholders currently stand at 2,05,781-- as against 1,79,325 as on June 30 2012 and the number of small individual investor were 3,072 as compared to 1,961 during the same period.