Mumbai, July 2:
With the
turnaround plans for Kingfisher Airlines yet to take off, ICICI Bank has bailed
out, selling its entire Rs 430-crore debt exposure in the airline.
The buyer is a
debt fund managed by Srei Venture Capital Limited (SVCL), the fund management
arm of Kolkata-based Srei Infrastructure Finance Ltd (SIFL).
In a statement,
ICICI Bank said it has ‘recovered’ the entire debt exposure of Rs 430 crore to
Kingfisher Airlines. India’s largest private sector bank, however, owns 2.07
per cent stake in the airline.
Adequate
collateral
Bankers say
when a debt fund or an asset reconstruction company buys a non-performing loan
from a bank, the transaction is usually at a discount to the face value. In a
statement, Srei Infrastructure said a debt fund managed by Srei Venture Capital
has invested in Kingfisher Airlines’ debt.
“It (SVCL) has
invested against good security with adequate collateral. The fund saw an
opportunity in the securities and commensurate returns being offered by this
proposal,” said Srei Infrastructure.
The airline,
which has been impacted by rising cost of fuel and competition, has struggled
to repay loans and interest to banks.
All efforts to
recast the airline’s debt have come to a nought so far. The cash-strapped
airline has not cleared all its dues to oil companies and airports and
defaulted on payment of service tax and TDS to the government.
Banks,
including State Bank of India, Punjab National Bank, Bank of Baroda, ICICI
Bank, IDBI Bank, and Bank of India, have been grappling with a debt exposure
aggregating Rs 7,000 crore.
SBI is the
biggest stakeholder in KFA, holding 3.49 per cent. IDBI Bank has a 2.16 per
cent stake and Bank of India 1.08 per cent. They acquired ownership in the
airline following conversion of a part of their loan into equity. Bankers will
meet tomorrow to take stock of the KFA recast proposal. Banks want the promoter
and promoter group, who collectively own 35.86 per cent stake in the airline,
to pump in fresh equity before seeking a loan lifeline.
KFA shares
closed 0.75 per cent down at Rs 11.96 per share on the BSE against the previous
close of Rs 12.05.
http://www.thehindubusinessline.com/industry-and-economy/banking/article3594366.ece
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