From ET Realty
MUMBAI: Lenders have pegged a reserve price of Rs 150 crore for Kingfisher House, which will be auctioned on March 17 to recover part of Rs 6,963-crore loans due from the defunct eponymous airline.
SBICAP Trustee Company, which is acting as an agent of the consortium of lenders, had taken possession of the 2,401-square-metre property in February 2015. The e-auction will be conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.
A consortium of 11 lenders has been struggling to recover their dues from Kingfisher Airlines (KFA) ever since it defaulted on its loans in 2012. Soon after being declared a defaulter, the airline was grounded and its fleet repossessed by lessors.
Despite the large exposure, banks do not have much of enforceable security. Besides Kingfisher House, the other assets include Mallya’s Kingfisher Villa in Goa and the Kingfisher brand, which was valued at Rs 4,000 crore by Grant Thornton. Banks have been trying to recover dues from Mallya, who has provided a personal guarantee of Rs 248 crore, and from United Breweries Holdings, which has issued a corporate guarantee of Rs 1,601 crore.
Real estate industry sources said although the property was situated in a prime location, it would have a limited upside because of height restriction on account of its proximity to the airport. The property presently consists of four levels – basement, lower ground, ground and upper floor.
SBI is the largest lender to KFA with an exposure of Rs 1,600 crore.
Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore) and Central Bank of India (Rs 410 crore).
UCO Bank has to recover Rs 320 crore, Corporation Bank Rs 310 crore, State Bank of Mysore Rs 150 crore, Indian Overseas Bank Rs 140 crore, Federal Bank Rs 90 crore, Punjab & Sind Bank Rs 60 crore and Axis Bank Rs 50 crore.