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The tussle over recovery of loans given to Kingfisher Airlines between a 17-member consortium of banks and promoter Vijay Mallya seems to have entered the last lap.
The lenders are set to start from next week the process to liquidate the physical assets pledged with them.
These assets, given to banks as collateral, include Mallya’s villa in Goa, Kingfisher’s office at Mumbai’s Andheri area, a luxury yacht, buses used by KFA to ferry travellers at airports and other ground-handling equipment.
Apart from physical assets, bankers also hold the pledged shares of United Spirits, Mangalore Chemicals & Fertilizers and KFA, besides corporate guarantees of United Breweries Holdings.
State Bank of India, on behalf of the consortium, has already started selling United Spirits shares.
It had said the total value of the collateral was estimated at Rs 6,500 crore (Rs 65 billion), against the total dues of Rs 7,000 crore (Rs 70 billion) to all banks, including the unapplied interest of Rs 850 crore.
The total value of collateral does not include the Kingfisher Airlines brand, also pledged with banks.
SBI will send the demand notice to KFA under Section 13(2) of the Sarfaesi Act; this means the company will have the chance to repay the loan within 60 days.
If it fails to repay the loans, the banks would invoke Section 13(4) of the Act.
After 90 days from the date the demand notice is sent, banks could sell the assets if the borrower is still not able to repay loans.
PLEDGED ASSETS
Image: Vijay Mallya | Photograph: Reuters
