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Monday, June 10, 2013

SBI authorised to file recovery suit against Kingfisher Airlines

Lenders plan to open a new ‘recovery’ front to realise their dues aggregating about Rs 7,000 crore from the defunct Kingfisher Airlines. They have authorised the State Bank of India to file recovery suit against the airline in the debt recovery tribunal.

The lenders have also given their consent to SBI to proceed against the guarantors of loans given to the Vijay Mallya-promoted KFA, said a banker privy to the consortium meeting held last week.

This development comes even as the 17-bank consortium, led by SBI, has sold off shares of Mangalore Chemicals and Fertilisers Ltd pledged by the airline’s promoter. The consortium is also realising its dues by selling the pledged United Spirits Ltd (USL) shares in tranches. The sale of USL shares by banks started in March even as the open offer by Relay B.V., an indirect wholly-owned subsidiary of Diageo Plc, for United Spirits’ equity shares was on.

The open offer, which closed on April 26, met with tepid response from public shareholders as the offer price was lower than the ruling market price. A total of 58,668 shares were tendered by the public shareholders of USL and accepted by Relay B.V. as against the target of acquiring up to 37,785, 214 equity shares, according to USL’s filing with the BSE. It may be recalled that the Kolkata-headquartered United Bank of India has independently filed a winding-up petition in the Karnataka High Court against United Breweries Holdings Ltd. The public sector bank moved against UBHL as it stood guarantee for loans taken by KFA.

So far, banks have realised about Rs 1,000 crore from KFA by selling the low-hanging fruits — pledged Mangalore Chemicals and Fertilisers Ltd and USL shares.

Bankers say they are bracing for a legal challenge as making recoveries from the pledged immovable properties such as Kingfisher House in Mumbai and a villa in Goa as well as pressing guarantors for making good the guarantees could prove an uphill task.

Source: thehindubusinessline


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