Kingfisher Airlines shares slumped on Wednesday after its lenders decided to start the process of recovering Rs 7,500 crore outstanding loans from the grounded airline. The decision was taken at a Tuesday meeting attended by the consortium of lenders and the airline's management, which included CEO, Sanjay Agarwal, and UB Group president and CFO, Ravi Nedungadi.
Kingfisher Airlines ended 5 per cent lower, its maximum daily limit. The stock had gained 10 per cent over the last two days after dropping as much as 26 per cent in the last month. It underperformed other aviation stocks such as SpiceJet and Jet Airways that ended the day 0.36 per cent and 0.18 per cent higher, respectively.
"They have not been able to come up with a plan. The consortium thought we cannot give them more time and we have decided to recall the loan. The recommendation will go to the Board...each bank will go to their respective boards and a notice will be served to Kingfisher Airlines following which there will be a legal recourse," Shymal Acharya, deputy managing director (mid-corporates) of SBI said.
State Bank of India has the maximum exposure of Rs 1,600 crore, followed by Punjab National Bank (Rs 800 crore), IDBI Bank (Rs 800 crore), Bank of India (Rs 650 crore) and Bank of Baroda (Rs 550 crore).