Bankers: Kingfisher shut down the last thing we want

The suspension of Kingfisher's licence has put at stake dues of banks, vendors and the Airports Authority of India (AAI).

"We will not allow about 40 of Kingfisher's aircraft to leave the country until they clear our dues. But recovery will be in trouble if banks stake claim to these assets," a top AAI official said.

The airline's lenders, including lead banker State Bank of India, however, said that recovery of loans through sale of its assets is the last option.

"... we are concerned as we have no control on these developments. We were prepared for all these. The last thing we bankers want is a complete shut-down of the airline, as we want the airline to resume operations and repay our money," said S Vishwanathan, managing director (mid-corporates), State Bank of India. The bank has over Rs 1,500 crore of exposure to the grounded airline.

The 17-bank consortium has total exposure of over Rs 7,000 crore to the airline.

Shyam Srinivasan, MD and chief executive of Federal Bank, which has an exposure of Rs 80 crore (en-cashed bank guarantee) said his bank had fully provided for this non performing asset in the March quarter itself.

An official of another public sector bank, which has an exposure of close to Rs 500 crore said, "Recovery is the last option we are looking at, as at best we will be able to recover just about 15 per cent of the total amounts from the pledged assets."

Vishwanathan further said, "There are three options for the airline and the banks. First, the airline restarts working and then starts repaying us; second, a new investor comes and we finance him or he repays our debt and runs it on his own; and finally the airline is completely shut down, in which case we will have to look at recovery measures."

... contd.

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