Has SREI bought ICICI Bank's Rs 400 cr debt exposure to Kingfisher?

At a time when employees of debt-ladden Kingfisher have gone on strike to protest against non-payment of salaries, there are some group of investors who seem to be taking interest in the company. According to Reuters, a debt fund managed by SREI Infrastructure Finance has bought about Rs 400 crore worth of debt of Kingfisher Airlines from ICICI Bank.

“There was an opportunity because of the various securities package and returns which were coming along with it, so based on that, the fund saw an opportunity,” SREI’s vice chairman Sunil Kanoria told Reuters. However, a CNBC-TV18 report points out that ICICI Bank is likely to have sold its Rs 430 crore debt to SREI as the bank’s spokesperson was quoted as saying “they have recovered the entire debt exposure of Rs 430 crore and currently do not have any debt exposure to the airline.”

 Recently, even Mumbai-based LKP Finance reportedly acquired optionally convertible debentures of the company for Rs 160 crore. This will account for 8 percent of the company’s equity once the debentures get converted in a couple of weeks’ time.

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However, the company’s problems seem far from over as the lessors have taken back 34 aircrafts as the company defautled on lease rentals of Rs 1,000 crore. As of 31st March 2012, the company reported a net loss of Rs 2,328 crore, far more than its market capitalisation of Rs 980 crore.

The stock has also been hammered on the exchanges at it has fallen by a steep 11 percent in the last one week compared to the 2.7 percent rise in the BSE Sensex.