Lenders pick up 23.37 % in Kingfisher in debt revamp
07 Apr 2011
Kingfisher Airlines announced on Wednesday that as part of its debt restructuring, a consortium of 13 lenders has taken a 23.37 per cent stake in the airline. The consortium includes State Bank of India, ICICI Bank, IDBI Bank, Bank of Baroda and Punjab National Bank.
The airline said that lenders have converted debt amounting to Rs1,400 crore into equity at a 60 per cent premium to the prevailing market price. The airline allotted 116 million shares to the consortium members at a conversion rate of Rs64.48 per share to cover a debt of Rs750.09 crore.
After the debt recast, the combined shareholding of Kingfisher's promoters has declined to 58.61 per cent from 66.28 per cent earlier, said an airline spokesperson.
The composition of stake held by foreign institutional investors, non-institutional investors and corporate bodies will also change with the hike in the equity base of the airline.
This cashless transaction was part of the restructuring agreed upon by the banks and the airline last year. Kingfisher, controlled by United Breweries Holdings, had agreed to convert Rs1,355-crore of the loans into shares, besides converting the promoters' debt of R648 crore to share capital. The debt restructuring process was handled by SBI Caps.
Among the lenders, State Bank of India and ICICI Bank now have about 11 per cent stake in Kingfisher Airlines. SBI was alloted 28 million equity shares on account of conversion of compulsorily convertible preference shares, the airline had informed the Bombay Stock Exchange.
The allotment of shares has given the SBI a 5.67 per cent stake in the airline, valued at Rs182.25 crore. ICICI Bank was allotted 26 million shares against the loan it had given the airline.
Conversion of debt into equity, termed normal by bankers, was the last element of the debt recast undertaken by Kingfisher lenders. According to a report the entire restructuring, including a reduction in interest rates, where no special dispensation was provided by the Reserve Bank of India, is estimated to result in an immediate hit of around Rs500 crore to the banks.