Negotiations with Kingfisher Airlines have not been fruitful: SBI Chairman

The Bank doesn't expect more provisioning to the Airline, which was grounded on October 1, 2012

State Bank of India (SBI) today said that so far negotiations with Kingfisher Airlines have not been fruitful and so far approach was to try and help the airline revive itself. The Bank also said it doesn't expect more provisioning to the Airline, which was grounded on October 1, 2012.

Pratip Chaudhuri, Chairman, State Bank of India, who was in Chennai today to donate a Tempo Traveller to Vidya Sagar NGO said that, if support comes from the Government that would be nice but the Government as of now have said they will only support the Air India and no other.

It may be noted, a consortium of 17 banks, which have lent about Rs 7,000 crore to the Vijay Mallya-led airline, said they would proceed towards recovering their loans by taking over assets which had been pledged.

“So our exposure to Kingfisher is Rs 1700 crore, we have made provisioning of Rs 1,650 crore. On account of KFA we donot expect more provisioning but the entire consortium of bank have decided to recall the advance this means sending a notice to the company saying you please pay back. Based on assets we hold we should be able to realise a good part of our dues,” said the SBI Chairman.

He added, it will be a little bit of complicated, long and protracted legal battle unless the company says let us get done with this and let us come to the table for a quick settlement. Some of the securities are easy to convert into cash for example the collateral we hold in the shape of shares of USL or UB group. Real estate or fixed assets take a little Longer to be sold.

Chaudhuri said so far negations have not been fruitful and so far approach was to try and help the airline revive itself, so that it flies again. But somehow the company has not shown enough energy or result on the ground. So this time the effort is not to restart but to realise the securities.