India's Kingfisher shares dive on bank loan recall plan
NEW DELHI (AFP) - Shares in India's debt-laden Kingfisher Airlines plunged as much as five per cent on Wednesday after banks said they would start recalling loans worth US$1.5 billion (S$1.8 billion), pushing it closer to collapse.
Kingfisher, controlled by Indian liquor baron Vijay Mallya, slid five per cent - the maximum daily limit - before clawing back some losses to trade down 4.58 per cent at 10.62 rupees in early afternoon.
The fall came after the airline's creditor banks announced late on Tuesday they would begin recalling outstanding loans worth around US$1.5 billion that could pave the way for sale of Kingfisher assets held as collateral.
"We have decided to recall (initiating the recovery process) the loans given to Kingfisher Airlines," Shymal Acharya, a deputy managing director of state-run State Bank of India, which heads the consortium of bank lenders, said.