Lenders may sell Goa's Kingfisher villa

PTI, PANAJI | 05 July 2012 23:39 IST

Lenders to debt-ridden Kingfisher Airlines today hinted at selling the carrier's two properties in Mumbai and Goa worth Rs. 120 crore to recover a part of the loan worth over Rs. 7,500 crore.

According to banking sources, the consortium of 17 bankers have appointed HDFC Securities to do a valuation of these two properties.

Kingfisher, which has been an NPA since January, denied recovery proceedings by its lenders, saying it had already proposed sale of these properties -- the Kingfisher House in the city and a villa in Goa - to bankers a few months ago.

According to bankers, while the Kingfisher House in suburban Andheri has a market value of Rs. 90 crore, a villa in Goa is valued at around Rs. 30 crore.

The decision to monetise two of the airline's properties follows a meeting between lenders and the company here today which did not make any headway.

"The Kingfisher House in Mumbai has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today's meeting we raised the issue of this pending approval," the airline spokesperson said in a statement here this afternoon.

The airline further claimed that today's meeting was a pre-scheduled one to update the lenders and that "there was no discussion on commencement of recovery proceedings".

Along with the personal guarantee from Kingfisher Chairman Vijay Mallya and other guarantees and pledges like the brand Kingfisher, these two properties are already pledged with the lenders following the November, 2010 debt recast.

The airline had a debt of Rs. 7,500 crore from 17 lenders led by SBI, which alone has an exposure of over Rs.1,400 crore. The airline has an equal amount of accumulated losses, as it has not made a single penny in profit since launch in May, 2005.

At the meeting today, which was attended by most of the 17 lenders and airline's chief executive Sanjay Aggarwal at the SBI headquarters here this morning, bankers reportedly gave a 15-day notice to the airline management to come up with concrete steps to improve operations.

Kingfisher has a total outstanding debt of Rs. 7,500 crore and an equal amount in accumulated loss. Out of the total loans, State Bank alone has an exposure of over Rs. 1,400 crore, followed by PNB (Rs 700 crore), Bank of Baroda (around Rs. 500 crore) and private lender ICICI Bank (Rs 430 crore), which had earlier this week sold its debt to a hedge fund run by Srei Infra. The carrier has not been paying salaries to employees for the past few months, besides defaulting on tax payments as well as bills to its vendors.

It has been seeking fresh bank funding since last December apart from raising overseas funds. Earlier this week, its pilots went on a strike for a day to demand salaries and dues.

Kingfisher at present has only 15 aircraft flying, including eight ATRs, while 15 of its aircraft are grounded due to non-availability of spares on account of fund crunch.

Its lessors have reportedly taken back as many as 34 aircraft after the company allegedly defaulted on the rentals amounting to around Rs. 1,000 crore.


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