SBI buying Air India properties in South Mumbai for Rs90 crore

State-run lender State Bank of India (SBI), which is looking to reduce its distressed assets through sale of seized assets worth around Rs1,200 crore, is now buying more distressed assets to add to its illiquid assets.

While SBI managed to sell 130 properties for around Rs100 crore in last week's sale, it is acquiring property worth Rs90 crore that cash-starved Air India has put on block.

SBI, which has received necessary approvals to buy the four flats in South Mumbai's up-market Peddar Road from Air India, for about Rs90 crore, is now reported to be awaiting the airline board's nod for the proposed sale of property.

The state-run banking major is planning to allocate these flats to top executives of the rank of deputy managing directors and general managers.

SBI had only last week put on the block around 300 properties worth Rs1,200 crore, including offices, shops, factory buildings and residential apartments in 25 cities, including Mumbai, through an e-auction last Saturday, but managed to find buyers for only 130 properties, realising just about Rs100 crore.

"We sold around 130 properties, largely residential through the e-auction process, realising about Rs100 crore," a PTI report quoted a senior SBI official as saying on Monday last.

Cash-starved Air India has been looking for buyers for the four flats for the last two years. "SBI is now waiting for the airline to complete its side of approvals," sources close to development said.

The airline had, in August 2013, floated bids for e-auctioning of four 3-BHK flats of 2,033 sq ft carpet area each in Peddar Road.