After moving decisively against the promoters of Kingfisher Airlines to recover a part of their dues, State Bank of India (SBI) is now planning to auction some of the properties Captain G R Gopinath had pledged with the bank to recover a part of the dues of Rs 210 crore (Rs 2.1 billion).
The auction has been scheduled for May 16 and 31. SBI on Friday put out ads in all major newspapers announcing the dates. Gopinath’s properties include a bungalow here, in the name of his wife. Gopinath and his wife are guarantors for the loan.
SBI, along with a few other banks, had given loans to Gopinath for Deccan Cargo, a venture he started in 2009, a few years after he sold Air Deccan to Kingfisher Airlines. It is understood Axis Bank among the lenders with significant exposure to Deccan Cargo, Gopinath’s venture.
Gopinath had started with Deccan Cargo, aiming to deliver cargo to and from tier-II and tier-III towns into major cities, hoping to ride the potential the segment offered. Reliance Industries’ Mukesh Ambani had made an investment of about Rs 135 crore (Rs 1.35 billion) into this venture. Industry experts say the execution of the strategy did not fall into place for Deccan Cargo, owing to which Gopinath couldn’t carry the venture business.
After the operations of the company were frozen, Gopinath had opted for corporate debt restructuring for its loans. However, this, too, did not progress due to doubts oh how Gopinath would boost operations after the restructuring. Subsequently, Gopinath tried to revive Deccan Charters, offering shuttle services in Gujarat through eight-seater aircraft. But after a promising start, this floundered due to low demand. Revenues in the traditional charter business started dwindling and Gopinath was forced to downsize and sell many of the aging aircraft.
PhotographL Courtesy, flyairdeccan.net