SBI chairman State Bank of India (SBI) on Monday said negotiations so far with Kingfisher Airlines (KFA) have not been fruitful, and till now the approach has been to try and help the airline to revive. The Bank said it didn't expect more provisioning to the airline, which was grounded on October 1, 2012.
Bank Chairman Pratip Chaudhuri, who was in Chennai on Monday to donate a Tempo Traveller to an NGO, said if support comes from the government it would be nice, but the government, as of now, has said it would only support Air India. It may be noted that a consortium of 17 banks, which have lent about Rs 7,000 crore to the Vijay Mallya-led airline, said they would proceed towards recovering their loans by taking over assets which had been pledged.
“So our exposure to Kingfisher is Rs 1,700 crore, and we have made a provisioning of Rs 1,650 crore. We do not expect more provisioning, but the entire consortium of bank have decided to recall the advance and this means sending a notice to the company saying ‘you please pay back’. Based on assets we hold we should be able to realise a good part of our dues,” said the SBI Chairman.
He added it would be a little bit complicated and protracted legal battle unless the company says ‘let us get done with this and let us come to the table for a quick settlement’. Some of the securities are easy to convert into cash. For example, the collateral we hold in the shape of shares of USL or UB group. Real estate or fixed assets take a little longer time to be sold.
Chaudhuri said so far negations had not been fruitful and so far the approach was to try and help the airline revive itself, so that it flies again. But somehow the company has not shown enough energy or result on the ground. So, now the effort is not to restart the airline but to realise the securities.
http://www.business-standard.com/article/finance/negotiations-with-kfa-have-not-been-fruitful-sbi-chairman-113021900046_1.html
Bank Chairman Pratip Chaudhuri, who was in Chennai on Monday to donate a Tempo Traveller to an NGO, said if support comes from the government it would be nice, but the government, as of now, has said it would only support Air India. It may be noted that a consortium of 17 banks, which have lent about Rs 7,000 crore to the Vijay Mallya-led airline, said they would proceed towards recovering their loans by taking over assets which had been pledged.
“So our exposure to Kingfisher is Rs 1,700 crore, and we have made a provisioning of Rs 1,650 crore. We do not expect more provisioning, but the entire consortium of bank have decided to recall the advance and this means sending a notice to the company saying ‘you please pay back’. Based on assets we hold we should be able to realise a good part of our dues,” said the SBI Chairman.
He added it would be a little bit complicated and protracted legal battle unless the company says ‘let us get done with this and let us come to the table for a quick settlement’. Some of the securities are easy to convert into cash. For example, the collateral we hold in the shape of shares of USL or UB group. Real estate or fixed assets take a little longer time to be sold.
Chaudhuri said so far negations had not been fruitful and so far the approach was to try and help the airline revive itself, so that it flies again. But somehow the company has not shown enough energy or result on the ground. So, now the effort is not to restart the airline but to realise the securities.
http://www.business-standard.com/article/finance/negotiations-with-kfa-have-not-been-fruitful-sbi-chairman-113021900046_1.html
No comments:
Post a Comment