Kingfisher shares fall after lenders say no consensus on bailout
A consortium of 16 lenders to the airline, including India’s largest bank State Bank of India, have been studying a debt-restructuring proposal presented to them last week.
Kingfisher Airlines’shares shed over 6 per cent on the Bombay Stock Exchange (BSE) after lenders said that there was no decision taken by lenders' consortium to restructuring the debt. Earlier, the company’s stock had soared nearly 5 per cent on reports of a relief package from lenders. The company's share price has fallen 36 per cent in the past year.
The government has repeatedly said that it will not bail out Kingfisher Airlines, which has cancelled scores of flights since Friday, leaving passengers across the country stranded.
A consortium of 16 lenders to the airline, including India’s largest bank State Bank of India, have been studying a debt-restructuring proposal presented to them last week.
Shares of State Bank of India saw strong selling pressure on reports that the public lender will provide a Rs 1,200 crore bailout package for debt laden Kingfisher Airlines. SBI, India's largest bank by assets, is Kingfisher Airlines' largest lender, at Rs 1,400 crore.
A State Bank of India official late on Wednesday denied that the bank has given any additional loan to Kingfisher Airlines during the current crisis.
"We have not given any fresh loans to Kingfisher,” R. Venkatachalam, a Deputy Managing Director at the bank who is responsible for managing the Kingfisher loan account told Reuters. "All media reports are baseless and untrue." The bank is not considering giving any fresh loans to Kingfisher as of now, he added. Reuters earlier in the day quoted banking sources to say that the lenders to Kingfisher Airlines have not agreed to extend further loans to it.
SBI stocks closed 7.9 per cent lower at Rs 2,257.80 on the BSE. Shares of Punjab National Bank, which is likely to provide a guarantee to the airline, slumped 4.6 per cent at Rs 1,022 on the BSE.
The BSE’s benchmark Sensex ended 283 points lower at 18,145, a 1.5 per cent decline, while the broader Nifty index declined 101.8 points at 5,505 on Wednesday.
