Banks seize assets from Mallya, Kingfisher shares fall near all time low
Indian banks have begun seizing assets controlled by Indian business mogul Vijay Mallya who could lose his luxury Goa holiday home over debts run up by his failing airline, a report said Monday.india Updated: Aug 12, 2013 16:31 IST
Indian banks have begun seizing assets controlled by business mogul Vijay Mallya who could lose his luxury Goa holiday home over debts run up by his failing airline, a report said Monday.
Lenders to his Kingfisher airline took possession of one of the group's corporate offices, Kingfisher House, in suburban Mumbai, the Economic Times said, quoting an unnamed bank official.
"Banks have already recovered some money, selling shares and would also look at attaching other physical assets, including Kingfisher Villa in Goa," the official was quoted as saying. A notice announcing this was pasted on the building's doors, it added. Shares in Kingfisher fell as much as 4.82 percent to 3.75 rupees, close to their lifetime low on Monday.
Kingfisher's spokesman Prakash Mirpuri was unavailable for comment when contacted by AFP. The carrier, whose planes have been grounded since October, has never made a profit since it began flying in 2005 and it owes vast sums to banks, airports, fuel suppliers and its staff. Kingfisher has a number of real estate assets that it put up as collateral against its loans, including its offices in Mumbai.
In February, banks started recalling the outstanding loans, estimated at $1.5 billion, which paved the way for the sale of Kingfisher assets held as collateral. Lessors have already taken back most of the planes which Kingfisher operated, as they were on lease, according to India's civil aviation regulator. Mallya, a one-time billionaire known for his flamboyant lifestyle, made his fortune in the family liquor business and controls an empire spanning beer, Formula One, fertilisers and engineering.
Mallya shut down the low-cost airline Kingfisher Red in September 2011 to cut down on losses. With operations of the main Kingfisher airline shut since last October, it is unclear how many of the airline's 4,000-odd staff -- most of them unpaid for months -- are still employed. Mallya is desperate to find an outside investor to help get the airline running again.
First Published: Aug 12, 2013 15:58 IST