Kingfisher lenders say recovery last option

Aviation regulator DGCA yesterday suspended the licence of the financially-troubled airline.

"At best, we will be able to recover just 10-15 per cent of our overall exposure if we were to monetise the pledged properties. So initiation of recovery measures will be our last recourse," a senior official of a city-based public sector lender told PTI.

This bank has around Rs 500 crore stressed exposure.

When contacted, SBI, which leads the consortium of 17 banks and has an exposure of over Rs 1,500 crore, said the airline was grounded for the past three weeks anyway and thus there is nothing new with the DGCA ordering suspension of its licence.

"Though there is nothing new following the DGCA suspension, we are concerned as we have no control on these developments," S Vishwanathan, managing director, mid- corporates at SBI said.

"We were prepared for all these. The last thing we bankers want is a complete shut down of the airline as we want it to resume operations and repay our money," he added.

Another lender said the DGCA action of suspending flying licence of the airline just formalises the shut down which it has been doing since the past three weeks and, therefore, it does not make any material impact.

The comments come a day after aviation regulator DGCA suspended the licence of Bangalore-based Kingfisher Airlines when the management failed to present a credible revival plan, including arrangements for clearing the seven months of salary dues on which the employees have been striking work since September 29. MORE