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Wednesday, April 6, 2011

SBI-led consortium picks up about 23.3% stake in Kingfisher

By Babu Ram-Mumbai, Apr 6 (PTI) As part of debt recast process of Kingfisher Airlines, a consortium of banks, including SBI and ICICI Bank, has converted debt of Rs 750 crore into equity shares amounting to over 23 per cent in the company. Kingfisher Airlines owed about Rs 7,600 crore to 13 banks which was restructured last year. As many as 11.6 crore shares were alloted to banks for Rs 750.09 crore. A conversion price of Rs 64.48 a piece was arrived on March 1 as per a SEBI guideline. The market value of these shares at today''s closing price of Rs 48.05 per share is Rs 557.38 crore. SBI was alloted 2.8 crore equity shares on preferential basis on account of conversion of compulsorily convertible preference shares under corporate debt restructuring, the bank said. By virtue the conversion, State Bank of India (SBI) holds 5.67 per cent in the airline. Another lender ICICI Bank was allotted 2.6 crore shares and the lender owns 5.3 per cent in the airline. Both the lenders together hold about 10.97 per cent in the carrier. The allotment of shares was done on March 31, 2011. This cashless transaction is a part of corporate debt restructuring agreed by banks and the airline company. Other large lenders like IDBI Bank, Bank of Baroda and Punjab National Bank have also got some stake in the airline after conversion of a portion of the debt. While IDBI Bank has got about 3.4 per cent stake in the second largest domestic airline company, Punjab National Bank holds about 1 per cent. After the debt restructuring, the combined shareholding of Kingfisher''s promoters has declined to 58.6 per cent from earlier level of 66.2 per cent, Kingfisher Airlines Director Ravi Nedungadi told PTI over phone from Bangalore. Nedungadi is also Chief Finance Officer (CFO) of UB Group, promoter of Kingfisher Airlines. The paid-up equity capital of the company has increased to Rs 497 crore from Rs 265 crore as allotmnet include fresh equities as well. "We have issued 5.68 per cent new equity shares to SBI, which is our largest lender, under the master debt recast plan which we accepted late last year," he said. This move by the lenders follows a decision taken during end-November 2010 on a debt recast package, effected after a one-time relaxation in restructuring guidelines sanctioned by the Reserve Bank of India. The consortium had given loans to UB Group''s Kingfisher Airlines which was restructured last year as the airline companies found difficult to repay loans hit by global meltdown. Shares of Kingfisher Airlines closed at 48.05, up 4.57 per cent on the Bombay Stock Exchange. .



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