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As many as 11.6 crore shares were allotted to the banks for Rs750.09 crore. The market value of these shares at Wednesday's closing price of Rs48.05 per share is Rs557.38 crore. This cashless transaction is part of the corporate debt restructuring agreed by the banks and the airline
Mumbai: As part of debt recast process of Kingfisher Airlines, a consortium of banks, including State Bank of India (SBI) and ICICI Bank, has converted debt of Rs750 crore into equity shares amounting to over 23% in the company, reports PTI.
Kingfisher Airlines owed about Rs7,600 crore to 13 banks which was restructured last year.
As many as 11.6 crore shares were allotted to the banks for Rs750.09 crore. A conversion price of Rs64.48 a piece was arrived on 1st March as per a Securities and Exchange Board of India (SEBI) guideline.
The market value of these shares at Wednesday's closing price of Rs48.05 per share is Rs557.38 crore.
SBI was allotted 2.8 crore equity shares on a preferential basis on account of conversion of compulsorily convertible preference shares under corporate debt restructuring, the bank said. By virtue the conversion, SBI holds 5.67% in the airline.
Another lender ICICI Bank was allotted 2.6 crore shares and the lender owns 5.3% in the airline.
Both the lenders together hold about 10.97% in the carrier. The allotment of shares was done on 31 March 2011.
This cashless transaction is a part of corporate debt restructuring agreed by banks and the airline company.
Other large lenders like IDBI Bank, Bank of Baroda and Punjab National Bank have also got some stake in the airline after conversion of a portion of the debt.
While IDBI Bank has got about 3.4% stake in the second largest domestic airline company, Punjab National Bank holds about 1%.
After the debt restructuring, the combined shareholding of Kingfisher's promoters has declined to 58.6% from earlier level of 66.2%, Kingfisher Airlines director Ravi Nedungadi told PTI over phone from Bangalore.
Mr Nedungadi is also chief finance officer (CFO) of UB Group, promoter of Kingfisher Airlines.
The paid-up equity capital of the company has increased to Rs497 crore from Rs265 crore as allotment include fresh equity as well.
"We have issued 5.68% new equity shares to SBI, which is our largest lender, under the master debt recast plan which we accepted late last year," he said.
This move by the lenders follows a decision taken during end-November 2010 on a debt recast package, effected after a one-time relaxation in restructuring guidelines sanctioned by the Reserve Bank of India.
The consortium had given loans to UB Group's Kingfisher Airlines which was restructured last year as the airline companies found difficult to repay loans hit by global meltdown.
Banks converted part of loans at Rs64.48 per share. Kingfisher had earlier said the price was arrived in accordance with the pricing guidelines prescribed by SEBI, which is the average of the past six months' price, 30 days prior to the relevant conversion date.
Shares of Kingfisher Airlines were trading 0.31% down at Rs47.90 in mid-morning trade on the Bombay Stock Exchange.