State Bank Of India

Troubles for cash-strapped Kingfisher Airlines continue, as bankers are considering classifying their exposures (Rs 1,400 crore) to the airline as non-performing assets. This would translate into a provisioning requirement of Rs 280 crore for the bank. SBI has the highest exposure to KFA among a consortium of banks including IDBI Bank, Bank of Baroda, Bank of India and ICICI Bank. According to sources, other banks like Bank of Baroda and Bank of India may also be mulling similar action if the airline misses its repayment deadlines. KFA is learned to have made payments to some of its smaller lenders. If the account is termed as an NPA, it will be referred to the corporate debt restructuring (CDR) cell, which will have to take a call on the way forward. Further, bankers maintain that they would consider freezing further lending to KFA until the CDR exercise is completed.

Banks have a total exposure of about Rs 7,000 crore to KFA, of which about Rs 4,000 crore is in the form of term loans. Banks like SBI, ICICI Bank and IDBI Bank have already faced mark-to-market losses to the tune of Rs 2,800 crore after the first debt recast in which part of their debt to the airline was converted to equity, since the KFA stock price has declined consistently since then.