State-run banks have lent Rs.6,901.86 crore to Kingfisher Airlines
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The government on Tuesday said state-run banks have lent Rs.6,901.86 crore to the cash-strapped Kingfisher Airlines.
Minister of State for Finance Namo Narain Meena said public sector banks (PSB) had so far an exposure of Rs.5,792.66 crore through fund-based and non-fund-based limits in the airline.
Also, they had put in Rs.1,109.20 crore through investment in cumulative redeemable preference shares (CRPS) and non-convertible cumulative redeemable preference shares (NCCRPS), Meena said in a written reply in the Rajya Sabha.
Defending the lenders, including the State Bank of India, who have been alleged to have bought overvalued shares of Kingfisher as collateral, the minister said this was done under the master debt recast arrangement (MDRA) with the airline.
"There was no overvaluation to accommodate the airline," he said.
"In terms of MDRA, a portion of the debt was carved out and issued as CRPS, which was subsequently converted into equity shares of Kingfisher Airlines at a price of Rs.64.48 per share on March 31, 2011, as against the prevailing market price of Rs.39.90 per share."
The minister said the banks took 11,63,30,639 equity shares of the airline.
The minister added that the banks had made an investment of about Rs.750.10 crore in the airlines shares and that the market value of these shares on December 7 stood at Rs.298.39 crore.
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