As many as four banks are contemplating selling assets of beleaguered air carrier Kingfisher Airlines to asset reconstruction companies (ARCs) to recover part of their dues. Led by State Bank of India, the 17-bank consortium is struggling to recover ₹6,963 crore of overdue debt from Kingfisher Airlines.
“Three-four banks are looking for stake sale to ARCs to realise some value out of Kingfisher Airlines’ assets that they posses,” sources said. Punjab National Bank (PNB), one of banks of the consortium, had recently declared Kingfisher Airlines, its guarantors Vijay Mallya and United Breweries Holdings, wilful defaulters. Earlier, United Bank of India (UBI)and SBI had done the same.
According to RBI guidelines, once declared wilful defaulter, no additional facilities will be granted to the borrower by any bank or financial institution.
Besides, such companies and promoters will be debarred from institutional finance for floating new ventures for a period of five years from the date of removal of their names from the list of wilful defaulters. SBI has the highest exposure of ₹1,600 crore to the airline. Other banks with exposure to the airline include PNB and IDBI Bank (₹800 crore each), Bank of India (₹650 crore), Bank of Baroda (₹550 crore), Central Bank of India (₹410 crore).
UCO Bank is yet to recover ₹320 crore, Corporation Bank ₹310 crore, State Bank of Mysore ₹150 crore, Indian Overseas Bank ₹140 crore, Federal Bank ₹90 crore, Punjab & Sind Bank ₹60 crore, and Axis Bank ₹50 crore.
As part of the recovery process, the consortium has decided to auction Kingfisher House in Mumbai next month.