Auction of Kingfisher House on Dec 19 with a cut in reserve price

The last date for submission of bid application documents, EMD amount and KYC documents has been set as December 16.

By: ENS Economic Bureau | Mumbai | Updated: November 26, 2016 1:34 am
Lenders to Kingfisher have not been able to recover their loans and their efforts have met with multiple hurdles. (File photo) Vijay Mallya

The e-auction of Kingfisher House — Kingfisher Airline’s corporate office in Mumbai — will be held on December 19 by SBICAP Trustee Company for a reserve price of Rs 115 crore. The last two attempts in March and August had failed owing to lack of interest from prospective buyers. The last date for submission of bid application documents, EMD amount and KYC documents has been set as December 16. The bidders are required to submit 10 per cent of the reserve price or Rs 11.5 crore as the EMD amount. The reserve price of the property has been reduced by 23 per cent from the first auction at Rs 150 crore.

SBICAP Trustee Company, a wholly-owned subsidiary of SBI Capital Markets (SBI Cap), in a public notice announced e-auction of the property. The auction is part of the recovery process of dues from the airline’s promoter Vijay Mallya, under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002. The public notice said that Mallya owed banks over Rs 6,963 crore.

Lenders to Kingfisher have not been able to recover their loans and their efforts have met with multiple hurdles.
Kingfisher House is among the assets pledged by the company to a consortium of 17 banks. In 2013, the I-T department had moved a Bengaluru court asking lenders to first settle the dues of the department amounting to Rs 350 crore as the property was attached under the I-T Act. The IT department had said that Kingfisher Airlines Limited (KAL) had deducted tax at source from employee’s salary and other payments but did not to remit it to the government account.

Kingfisher Airlines, which has not flown since October 2012, owes close to Rs 7,000 crore to bankers who have been trying to recover their money by selling securities pledged by the firm. These include real estate and shares in multiple group entities. (With inputs from FE)