ICICI Bank, one of Kingfisher's lenders which also has a charge on promoter Vijay Mallya's liquor company shares, has asked the airline to provide additional securities or pay up following a sharp drop in the value of its shares. The notice comes at a time when shares of the airline fell 6% to a new low of Rs 16.75 yesterday.
Compared to other lenders, ICICI Bank appears to have an upper hand as the lender has shares of Mallya's liquor business pledged against securities for another loan. According to banking sources, cash flow into some of the accounts over which lenders had a charge had dried up after IATA pulled the plug on the airline. "We would like to clarify that following the recent decline in the share prices of Kingfisher Airlines, ICICI Bank has, as a matter of routine, requested that security be topped up or that the loan amount be adjusted suitably. There is absolutely no recall of the entire loan facility nor any notice for sale of securities," Kingfisher said in a statement.