PSU banks bear brunt for reviving Kingfisher Airlines

New Delhi: Eleven public sector banks, which were alloted shares by Kingfisher Airlines as part of debt recast package, have seen erosion of about Rs 165 crore in the value of the 17.5 per cent equity held by them in the debt-ridden carrier.
These banks, including State Bank of India, Punjab National Bank, Bank of India and IDBI Bank were alloted 8.8 Kingfisher shares on March 31, 2011 at Rs 64.48 a piece as per the SEBI formula.
The market price of the share had declined to Rs 40.95 even before the actual allotment took place.
While the scrip price has since improved to Rs 45.70 (Friday closing), it is much less than the allotment rate, resulting into the erosion of the valuation of the Kingfisher portfolio alloted to banks.
Of the total debt of about Rs 7,600 crore, in all 13 banks including private sector ICICI Bank agreed to convert loans worth Rs 750 crore into equity. Bulk of it related to the PSU banks.
Of this the loans by PSU banks converted in to equity was Rs 568 crore. The value of this portfolio has gone down to Rs 403 crore resulting in erosion of Rs 165 crore, as per the market information.
10/04/11 PTI/Economic Times

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Categories: Kingfisher Apr 2011