Banks decide to start recovery of Kingfisher Airlines loans
Banks were hopeful that some money would flow into the airline after Mallya sealed Rs 11,100 crore Diageo deal by selling majority stake in his liquor business United Spirits.
Mallya had, however, said these are two different companies.
The bankers were also banking on some equity infusion into the airline by a foreign player following the enabling regulatory environment, but the airline has not been able to find an investor so far.
All the 17 banks have provided for their exposure to the airline and declared them as bad loans. Since Januray 2012, the airline has not serviced the loan.
Among other banks, United Bank of India has Rs 430 crore, Central Bank of India (Rs 410 crore), Uco Bank (Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).
Lenders outside the consortium are Srei Infrastructure Finance (Rs 430 crore), Jammu & Kashmir Bank (Rs 80 crore) and Oriental Bank of Commerce (Rs 50 crore).
It is clear that banks will have take deeper cuts as the airline has not given practically anything in quarantees. The airline has pledged the Kingfisher Villa in Goa and