Government rules out second round of debt restructuring for Kingfisher
10 Dec 2011
New Delhi/Mumbai: With market analysis suggesting that attempts to restructure massive debt incurred by struggling airlines may impact the capital adequacy ratios of lender banks, the government has clarified that state-owned banks have no plans for a second round of restructuring of loans to private carrier Kingfisher Airlines.
The statement was made in Parliament by the junior minister of finance on Friday.
Kingfisher, now India's third-largest airline, issued shares to a consortium of 13 banks led by State Bank of India in the month of March and allotted shares to its founders in a restructuring process that helped pare debt.
"State Bank of India, leader of the consortium, has stated that at present there is no such plan," minister of state, finance, Namo Narain Meena said in Parliament, in answer to a query whether banks are planning to carry out a second restructuring of loans.
Government documents show that 19 banks have an exposure of Rs6,419 crore to the airline. SBI, India's largest lender, has the maximum exposure of Rs1,457 crore as of end-November.
"The repayment to SBI in respect of advances by Kingfisher Airlines will commence from September 2012.