Kingfisher allots 5.7 per cent stake to SBI

Kingfisher board had last year approved a debt recast plan under which the airline operator would convert some of its debt into equity in its efforts to reduce the interest burden and stem losses. File photo

Vijay Mallya-led Kingfisher Airlines on Wednesday said it has allotted 5.68 per cent shares, valued at around Rs. 180 crore, to the State Bank of India on a preferential basis under the debt recast plan.

“Yes, it is true, we have issued 5.68 per cent new equity shares to SBI, which is our largest lender, under the master debt recast plan which we accepted late last year,” the ailing Kingfisher Airlines Chief Financial Officer Ravi Nedungadi told PTI over phone from Bangalore.

SBI chief financial officer Hemant Contractor could not be reached for comments.

Earlier on November 25 last year, the Kingfisher board had approved a debt recast plan under which the second largest airline operator by market share would convert some of its debt into equity in its efforts to reduce the interest burden and stem losses.

Kingfisher, controlled by United Breweries Holdings, had agreed to convert Rs. 1,355 crore worth loan into shares. The airline had mandated SBI Caps for the debt restructuring.

Following the ripple effect of the September 2008 financial meltdown, the domestic aviation industry which was flying high hit an air-pocket, as the domestic economic growth slowed down and crude prices went sky high.

The Reserve Bank had cleared a debt restructuring proposal for the sector in September 2010.

The company’s shares settled at Rs. 48.05 apiece up 4.57 per cent from its previous close on BSE.