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Lenders to meet over KFA suspension

Anxious over the suspension of Kingfisher?s flying licence, lenders have called an urgent meeting this week to work out their plan of action against the debt extended to the airline.

Anxious over the suspension of Kingfisher?s flying licence, lenders have called an urgent meeting this week to work out their plan of action against the debt extended to the airline.

?Though the best thing for the lenders would be that the airline resumes operations, but with the suspension, things are in a bind. We (all the bankers) will meet this week to take a call on how to handle this situation,? a banking official said on condition of anonymity.

Kingfisher officials were supposed to meet bankers towards the end of this month to present a concrete plans for the turnaround of the company. However, with the DGCA?s suspension orders, the bankers have decided to have an internal meeting prior to their meet with Kingfisher promoters.

The Vijay Mallya-owned airline owes about R7,000 crore to a consortium of 13 banks, including State Bank of India, IDBI Bank, ICICI Bank and Punjab National Bank. The bankers are also seeking more assets, including the other brands of the UB Group to be mortgaged against the loan given to the airline.

?We want more security against the R7,000-crore funds that have been lent to the airline. The valuation of brand ?Kingfisher Airlines? has fallen significantly, more so, in the last few months. We are looking at many options, including getting other brands of the UB Group to be charged as collateral,? said a lender.

The company has already pledged assets, including its Goa Villa, two helicopters, Kingfisher house in Mumbai and shares. The promoter ? Vijay Mallya ? has also given personal guarantees to the banks. The brand ?Kingfisher Airlines? was charged as collateral in 2010. It was then valued at around R4,100 crore. This, according to a bank official, has come down to R3,000 crore. ?We would like to have more securities which may be only for the purpose of recovery,? he said.

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First published on: 22-10-2012 at 20:53 IST
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