Banks may tweak auction prices of Mallya’s assets - Hindustan Times
close_game
close_game

Banks may tweak auction prices of Mallya’s assets

Hindustan Times | By, Mumbai
May 03, 2016 02:33 AM IST

With banks holding debt and interest of Rs 9,000 crore, and Mallya still in the UK, lenders are unwilling to relax their stand: they want to be paid, and will fight tooth and nail

Three months after Vijay Mallya left India with Rs 9,000 crore in unpaid loans to banks and move to auction Kingfisher Airlines’ office complex and corporate brands failed to find any takers, lenders are gearing up to pursue recovery of their money to the last drop.

UB Group chairman Vijay Mallya being interviewed by the Financial Times in London last week. He says he wants to settle up, but a reasonable amount that he can afford(PTI file photo)
UB Group chairman Vijay Mallya being interviewed by the Financial Times in London last week. He says he wants to settle up, but a reasonable amount that he can afford(PTI file photo)

Though there may not be any immediate reduction in each of the reserve prices, banks are likely to look at potential entities that could make good the brand, or tweak the price to suit any interested buyer.

Hindustan Times - your fastest source for breaking news! Read now.

On Saturday, bankers found no bidders for the online auction of the Kingfisher brand, trademarks and logos, priced at Rs 366.7 crore, less than one-tenth of the brand valuation of about Rs 4,000 crore done in 2010.

“The reserve price may have been a tad high going by the current status of Kingfisher (Airlines)... There could be some airline firm or any interested entity or businessman wishing to enter the aviation industry, who can make good, resurrect or turnaround the image of this famous brand…After all, Kingfisher was a much-loved airline once,” said a senior public sector banker on the condition of anonymity. “The legal process is going on and we have waited long. We can wait more to extract the most till such time the legal process is on.”

Last month, the auction of the airline’s 17,000-sq-feet headquarter, Kingfisher House, situated in Mumbai, also failed to attract bidders.

Read: Auction for Kingfisher Airlines brands fails as no bidder turns up

Earlier, United Breweries, the maker of Kingfisher beer, had warned banks in an official statement that a buyer could use the logo only to set up another airline and for nothing else, and anybody buying it for any other purpose would be legally challenged as it held exclusive rights to the brand.

With banks holding debt and interest of Rs 9,000 crore, and Mallya still in the UK, lenders are unwilling to relax their stand. State Bank of India (SBI), United Bank of India, IDBI Bank and Punjab National Bank have already declared Mallya wilful defaulter.

“We don’t read much of what he (Mallya) says to others. We are treating the loan account like any other loan account for recovery…We have provided enough towards the loan account…The courts are hearing and we want that to continue till a decision is arrived at,” another banker said.

The 17-lender consortium led by SBI scrapped Mallya’s earlier offer of a settlement made to banks last month, after the matter reached the Supreme Court.

Bankers are being criticised for laxity with a widespread belief that proper due-diligence was not done when loans were given out.

According to reports, banks have so far recovered only around Rs 1,240 crore, and a similar amount has been encashed through the selling of pledged shares in group companies. But the money is held up in various court cases.

Apart from legal agencies, including the Supreme Court, CBI and Debt Recovery Tribunals investigating the case, the Enforcement Directorate has issued a non-bailable arrest warrant against Mallya in a money-laundering case. His diplomatic passport has also been revoked.

Finance minister Arun Jaitley recently said in Parliament that banks were seeking to recover “every penny” from Mallya.

Read: Mallya resigns from Rajya Sabha, a day before ethics committee meeting

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
  • ABOUT THE AUTHOR
    author-default-90x90

    Beena Parmar has been is a banking and finance journalist for over 10 years. Apart from BFSI, she covers the private equity and venture capital space. Beena loves to read about politics, society.

SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, March 19, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On