ICICI Bank demands more security from crippled Kingfisher
27 March 2012
Kingfisher Airlines, struggling to pay its staff and keep airborne the handful of planes it still operates, has been asked by lender ICICI Bank to top up its loan security or adjust the loan amount as the carrier's stock continues to be in free fall.
"There is absolutely no recall of the entire loan facility, nor any notice for sale of securities," Kingfisher said in a statement.
ICICI Bank has lent about Rs600 crore to Kingfisher, which has total debts of $1.3 billion, and is scrambling to raise funds after banks refused to lend more for its day-to-day operations.
ICICI Bank acquired its stake when the airline converted a part of its loan to equities and issued those to lenders as part of a debt recast package.
But now the bank has asked the airline to provide more collateral for the loans given or a part refund of its loan, which it fears may turn into a bad or non-performing asset (NPA), for which banks are obliged to keep aside provisions.