Kingfisher down 5% in early trade
Mumbai: Shares of Kingfisher Airlines Tuesday plunged 5 percent in early trade on bourses after banks decided to start the process of recovering Rs 7,500 crore outstanding loans from the grounded airline.
The stock plunged 4.94 percent -- the maximum daily limit and touched Rs 10.58 on the BSE. A similar movement was witnessed on the National Stock Exchange, where it opened on a weak note and fell further to touch an early low of Rs 10.55.
"We have decided to recall (initiating the recovery process) the loans given to Kingfisher Airlines. However, each bank board will decide the future course of action," Shymal Acharya, the Deputy Managing Director (Mid-Corporates) of SBI, which is leader of consortium of lenders, had said yesterday after a two-hour meeting of bankers with the company's representatives.
The decision comes even as Kingfisher Chairman Vijay Mallya has promised to airline employees about clearing their salaries for 11 months and has assured of restarting operations with the forthcoming summer schedule.
Kingfisher has been grounded since October 1 last after a labour unrest due to non-payment of salaries which have not been paid since last May.
The exposure of banks to the troubled carrier runs into Rs 6,360 crore. Unpaid interest and compounded interest take it to over Rs 7,500 crore.