No second round of debt restructuring for Kingfisher

Banks have no plans to carry out a second round of debt restructuring of the ailing Kingfisher Airlines which has an outstanding loan of around Rs 6,419 crore (Rs 64.19 billion), Parliament was informed on Friday.

"State Bank of India, leader of the consortium (of 11 lenders to Kingfisher), has stated that at present, there is no plan," Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.

He was replying to a question on whether lenders are planning to carry out a second round of restructuring of loans to help Kingfisher.

The Minister further said the airline has a total outstanding loan liability of Rs 6,419.60 crore (Rs 64.19 billion), which include Rs 9,730.37 crore (Rs 97.3 billion) provided to Kingfisher for non-fund based activities.

State Bank of India, the minister said, has an exposure of Rs 1,457.78 crore (Rs 14.57 billion), followed by IDBI Bank (Rs 727.63 crore or Rs 7.27 billion), Punjab National Bank (Rs 710.33 crore or Rs 7.1 billion), Bank of India (Rs 575.27 crore or Rs 5.75 billion) and Bank of Baroda (Rs 537.51 or Rs 5.37 billion).

The other lenders which have provided funds to the airlines include ICICI Bank, Central Bank of India, United Bank of India, UCO Bank, and Corporation Bank.

SBI has already exceeded the exposure limit of Rs 1,436.1 crore (Rs 14.36 billion) in Kingfisher.

Of the total outstanding of Rs 6,419.60 crore (Rs 64.19 billion), Rs 750.10 crore (Rs 7.5 billion) has been converted into cumulative redeemable preference shares and Rs 553.10 crore (Rs 5.53 billion) as non-convertible cumulative redeemable preference shares to be redeemed after 12

years.

Meena further said that Kingfisher is scheduled to start repaying loans to SBI from September 2012.

"Servicing of interest is being done with some delay," he added.

Giving details of the security given by Kingfisher Airlines, Meena said the airlines' chairman Vijay Mallaya has given a personal guarantee of Rs 248.97 crore (Rs 2.48 billion), while United Breweries Holdings, which he heads, has provided a corporate guarantee of Rs 1,601.43 crore (Rs 16.01 billion).

In addition, Kingfisher has provided a pooled collateral security of Rs 5,238.59 crore (Rs 52.38 billion), which includes Kingfisher House in Mumbai, Kingfisher Villa (Goa), and hypothecation of helicopters.

The airline has also hypothecated the Kingfisher Brand which was valued at Rs 4,111 crore (Rs 41.11 billion) by Global consultancy firm Grant Thornton.

Besides, the pledged securities include ground support and other equipment (Rs 101.58 crore or Rs 1.01 billion), computers (Rs 22.43 crore or Rs 224.3 million), office equipment (Rs 13.39 crore or Rs 133.9 million), furniture and fixtures (Rs 33.35 crore or Rs 333.5 million) and an aircraft (Rs 107.77 crore (Rs 1.07 billion).

The figures were annexed with the ministers written reply.