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KFA owes Rs 7,000 cr to lenders : Banks take possession of KF House in Mumbai
A consortium led by State Bank of India (SBI) has taken possession of Kingfisher (KF) House, the corporate office of now defunct Kingfisher Airlines (KFA) which owes about Rs 7,000 crore to the lenders. Last week a possession notice was pasted on the gates of Kingfisher House in suburban Andheri. The property is valued at Rs 93 crore, as per estimates. It may be noted that Kingfisher Airlines also failed to pay service tax collected from passengers to tax authorities. The tax authorities are also a party to the assets of Kingfisher. Sources said there are some issues with the Service Tax Department and the matter is before the court.
So far, the banks have recovered Rs 550 crore by selling assets of KFA
- KFA also failed to pay service tax collected from passengers. Hence, the tax authorities are also a party to the assets of the airline
Mumbai (PTI): A consortium led by State Bank of India (SBI) has taken possession of Kingfisher (KF) House, the corporate office of now defunct Kingfisher Airlines (KFA) which owes about Rs 7,000 crore to the lenders. Last week a possession notice was pasted on the gates of Kingfisher House in suburban Andheri. The property is valued at Rs 93 crore, as per estimates. It may be noted that Kingfisher Airlines also failed to pay service tax collected from passengers to tax authorities. The tax authorities are also a party to the assets of Kingfisher. Sources said there are some issues with the Service Tax Department and the matter is before the court.
Therefore, sources said, it would be difficult to say how long it would take to recover the money from that asset. Besides, a villa of the airline in Goa is also a part of security given to banks against loans. Following the November 2010 debt recast, both the properties are pledged with the lenders, along with personal guarantee of Kingfisher Chairman Vijay Mallya and other guarantees and pledges like the brand Kingfisher. SBI Caps, on behalf of lenders, had issued a notice to Kingfisher under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act on May 3, 2013. The notice is a precursor to acquiring a defaulter's property under the Act.
The consortium of 17 banks, led by SBI, has an outstanding of over Rs 7,000 crore from the carrier. SBI has the maximum exposure, over Rs 1,800 crore in the Vijay Mallya-led airline. It is followed by PNB (with Rs 800 crore, IDBI Bank at Rs 800 crore, Bank of India at Rs 650 crore and Bank of Baroda has Rs 550 crore. United Bank of India has Rs 430 crore, Central Bank of India (Rs 410 crore), Uco Bank (Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).
Lenders outside the consortium are Srei Infrastructure Finance (Rs 430 crore), Jammu & Kashmir Bank (Rs 80 crore) and Oriental Bank of Commerce (Rs 50 crore). KFA has been grounded since October 1 last year after a labour unrest due to non-payment of salaries which have not been paid since last May. So far the banks have recovered Rs 550 crore by selling assets of KFA, SBI deputy managing director Shyamal Acharya said at the announcement of the first quarter number of the bank. However, he refused to divulge other details citing court cases over the issue.
