SBI prepares to auction assets of Capt Gopinath's failed air ventures
04 May 2013
The State Bank of India (SBI), keen to cut its losses on loans to failed airlines, has announced that it will launch an auction of a sprawling property in Bangalore owned by Deccan Cargo, an arm of Captain G R Gopinath's long-grounded airline venture.
Already hammered by its doubtful loans to liquor baron Vijay Mallya for his virtually dead Kingfisher Airlines, SBI is invoking the corporate assets of Gopinath, founder of the grounded Deccan Cargo and Express Logistics.
The e-auction of the 9,000 sq ft corporate office of Deccan Cargo and its arm Express Logistics in the business district of Bangalore will begin on 16 May and end on 31 May, SBI said in an ad published in several major newspapers on Friday.
'Captain' Gopinath, as the pioneer of low-cost air services in India likes to be called, owes SBI Rs210 crore.
SBI, India's largest lender, along with some other state-owned banks had given loans to Gopinath's Deccan Cargo, a venture he started in 2009, a few years after he sold Air Deccan to the now-failed Kingfisher Airlines.
Gopinath had started with Deccan Cargo, aiming to deliver cargo to and from tier-II and tier-III towns. Reliance Industries' Mukesh Ambani has invested about Rs135 crore in this venture.
After the operations of the company were frozen, Gopinath opted for corporate debt restructuring of the company's loans. However, this too did not progress due to doubts about how Gopinath would improve operations after the restructuring.
Subsequently, Gopinath tried to revive Deccan Charters, offering shuttle services in Gujarat through eight-seat planes. But this floundered due to lack of demand. Revenues dwindled, forcing the captain to downsize and sell many of his aging aircraft.