Kingfisher House auction in March, base price Rs150 cr

13 Feb 2016

1

The State Bank of India-led lenders' consortium has decided to auction Kingfisher House in Mumbai on 17 March in a bid to recover a part of the Rs6,963 crore due from the long-grounded Kingfisher Airlines.

The e-auction will be done under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

SBICAP Trustee Company Ltd, which took possession of the property last year, will conduct the e-auction of the 2,401.70-square metre property.

The Trustee Company has kept the reserve price at Rs150 crore and the bid increment amount is Rs5 lakh, a public notice said.

The earnest money deposit for this auction has been fixed at Rs15 lakh.

As per the notice, the borrower is Kingfisher Airlines and guarantors are United Breweries (Holdings) Ltd and Vijay Mallya.

Kingfisher Airlines, started by liquor baron Mallya in May 2005, went on to become the second largest carrier in its heyday even though it never made a profit.

As cash flow issues mounted, it has remained grounded since October 2012, and the airline lost its flying licence two months later.

The SBI-led consortium had taken over the Kingfisher House near Mumbai airport in February 2015 worth around Rs150 crore, after winning the case in the local court.

They have also taken over the Kingfisher Villa in Goa, worth around Rs90 crore.

So far, the lenders have recovered around Rs1,600 crore from their original exposure of Rs6,900 crore by selling pledged shares and other collaterals.

The banks have moved the Debt Recovery Tribunal, Bengaluru, and the Karnataka High Court, and the company said it is contesting their claims.

Banks are now charging 15.5 per cent compounded interest on this principal amount, which has not been serviced since January 2013.

SBI has the highest exposure of Rs1,600 crore to Kingfisher Airlines.

Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs800 crore each), Bank of India (Rs650 crore), Bank of Baroda (Rs550 crore), and Central Bank of India (Rs410 crore).

The others are UCO Bank which has to recover Rs320 crore, Corporation Bank (Rs310 crore), State Bank of Mysore Rs150 crore, Indian Overseas Bank Rs140 crore, Federal Bank Rs90 crore, Punjab & Sind Bank Rs60 crore and Axis Bank Rs50 crore.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more