KFA loan recovery not possible in near-term: UBI to BSE

State-run lender United Bank of India informed the BSE that it does not expect to recover Rs 400 crore it had lent to the grounded Kingfisher Airlines in the short-run but hoped the recovery could be possible in the long-run.

The statement came after the stock exchange sought clarification from the lender regarding yesterday's PTI report which quoted its MD & CEO P Srinivas as saying that the bank did not expect to recover Rs 400 crore loan given to the airline.

"Considering the long-drawn nature of these legal entanglements, claims raised by other statutory/regulatory authorities in view of the defaults committed by the borrower (Kingfisher Airlines) under other statutes and regulations and the amounts recovered so far, the bank feels that the possibility of any immediate major break-through in the account is difficult for the present," the bank said in a filing to the exchange.

The 17-member consortium, led by State Bank of India, could recover only a little over Rs 1,000 crore by selling pledged shares in group companies since they formally recalled the loan in February 2013. In February this year, the banks took over the Kingfisher House after a long legal battle. The over 17,000 sq ft property near the city airport can fetch around Rs 100 crore.