Companies

Lenders cut reserve prices of KFA properties for March auction

Our Bureau Mumbai | Updated on January 27, 2018 Published on February 17, 2017

Vijay Mallya

Following demonetisation and the consequent thaw in real estate prices, it remains to be seen if buyers will be enthused by the reduced reserve price.



In a bid to sell Kingfisher House (Mumbai) and Kingfisher Villa (Goa) and recover at least a part of their dues aggregating about ₹9,000 crore owed by the defunct Kingfisher Airlines (KFA) Ltd, the 17-bank consortium led by State Bank of India has again brought down the reserve price on these two properties.

The reserve price of Kingfisher House, abutting the domestic airport and admeasuring 1586.24 square metres (built up), has been reduced from ₹135 crore at the last auction to ₹103.50 crore at the upcoming auction, scheduled in early March.

Similarly, the reserve price of the palatial Kingfisher Villa (having an aggregate area of 12,350 square metres in Candolim Village, Goa), where KFA promoter Vijay Mallya used to throw lavish parties, has been cut from ₹85.30 crore to ₹73 crore.

Previous attempts to auction these properties came a cropper as the prospective bidders reportedly found the reserve price high. But following demonetisation and the consequent thaw in real estate prices, it remains to be seen if buyers will be enthused by the reduced reserve price.

A senior public sector bank official said, “Buyers will be keen to buy the properties if they can put them to commercial use and get good returns. So, before they bid at the auction they will want to know their re-development potential.”

While the name of title deed holder in the Kingfisher House is KFA Ltd, the same in the case of Kingfisher Villa is United Breweries (Holdings) Ltd. Banks took physical possession of Kingfisher House and Kingfisher Villa on February 24, 2015, and May 13, 2016, respectively.

The guarantors to both the properties are United Breweries (Holdings) Ltd and liquor baron Vijay Mallya, who is now in London. The Ministry of External Affairs has handed over the request for extradition of Vijay Mallya, as received from the Central Bureau of Investigation, to the UK High Commission in New Delhi.

As on May 31, 2013, the amount due from KFA was ₹6203.35 crore. With further interest thereon at the rate of 11.50 per cent per annum with yearly rests with costs and charges, this amount has reportedly gone up to about ₹9,000 crore.

Published on February 17, 2017
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