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Lenders likely to consider asset sale in Kingfisher

Even as lenders decided to meet later this week to consider invoking securities and guarantees against the loans given to Kingfisher Airlines,LKP Finance,a Mumbai-based non-banking finance company,acquired 16.48 per cent equity stake in the airline following the conversion of optionally convertible debentures into equity shares.

Written by ENS Economic Bureau | Mumbai | Published: July 3, 2012 2:26:47 am

Even as lenders decided to meet later this week to consider invoking securities and guarantees against the loans given to Kingfisher Airlines,LKP Finance,a Mumbai-based non-banking finance company,acquired 16.48 per cent equity stake in the airline following the conversion of optionally convertible debentures (OCDs) into equity shares.

LKP Finance had recently acquired 2.8 crore 8 per cent OCDs in the airline. This has been converted into 13.32 crore shares,giving it a significant stake of 16.48 per cent. At Rs 100 per OCD,the original investment of LKP could be around Rs 280 crore. “It is not known whether this is purely an investment or a warehousing deal,” said a market source.

Bankers said they were running out of patience. “There are no signs of any strategic investors coming in. There’s no indication of FDI in the aviation sector as well. We have to explore various options,including security invocation,to get back our money,” said an official of a nationalised bank.

“There is a bank consortium meeting on July 5 and an agenda has been circulated. There is no mention of security invocation and it would be inaccurate and/or misreporting to speculate otherwise,” said a Kingfisher spokesman. Meanwhile,a debt fund operated by Srei Infrastructure Finance has bought out the entire exposure of ICICI Bank,worth around Rs 430 crore,in Kingfisher Airlines.

The holding of promoters Vijay Mallya-led UB Group in the airlines has dipped to a low of 35.86 per cent. After excluding the shares they have pledged,the promoters hold a meagre 3.55 per cent in the crisis-ridden airline.

Crisis deepens at KFA as talks fail
New Delhi:
Talks between Kingfisher Airlines and its employees on Monday failed to make any headway after the airline refused to offer any commitment to pay salary dues.

“We want immediate payment of two months’ salary. But the management did not offer any commitment as to when they intend to pay us. So we have decided to continue with our agitation,” Captain Yatin Pandit said. pti

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