Vijay Mallya's Kingfisher House Auctioned at Rs 150 Crore Base Price
By Staff Writer
Mar 17, 2016 10:02 PM EDT
Mar 17, 2016 10:02 PM EDT
A council of State Bank of India started the process of putting to public sale Vijay Mallya's Kingfisher house located in Mumbai. The move is to recover a portion of the Rs 6,963 crore debt because of the no longer operating Kingfisher Airlines.
SBI Cap Trustee Co Ltd is an arm of SBI caps which is the merchant banking arm of State Bank of India that administered the e-auction. The house was reserved at a fixed price of Rs 150 crore. Last month, the bank council took over the Kingfisher House from a court order. The house now becomes the headquarters of the obsolete Kingfisher Airlines. The council also controlled the Kingfisher Villa in Goa that is worth around Rs 90 crore, as reported by India Today.
The auctioned property is expected to produce interest among retailers and corporate houses primarily because of its adjacency to the highway; even if some real estate agents say that the property's price should be higher. Interested buyers will bid online for the multi-storey building with an area of more than 17,000 sq. ft.
The consortium that started the public auction consists of 17 banks led by the State Bank of India to recover the Rs 9,000 crore loan granted to the controversial airline. The property will be sold via an e-auction under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002 where SBICAP Trustee Ltd. will be the consortium to manage the auction, according to Livemint.
"Kingfisher House will find buyers mainly because of its strategic location. It is not a very large property but a very high potential in terms of development. It is a strategic location for many businesses specially related to aeronautics, airlines-related businesses, logistics or even corporate houses and banks," said Sanjay Dutt, executive managing director, Cushman & Wakefield.
So far, lenders were able to recover about Rs 1,600 crore from their initial exposure of Rs 6,900 crore by selling agreed shares and other collaterals convertible to cash. Banks have moved the Bengaluru, Debt Recovery Tribunal and the Karnataka High Court stating that the company is disputing their claims. Banks are now imposing a compound interest of 15.5% on this principal amount that was not serviced since January of 2013, Hindustan Times noted.
An SBI consortium has led the selling of the Kingfisher House through an online auction expecting it would generate sufficient amount to pay for the loans granted to Kingfisher Airlines. Lenders are optimistic to recover the amount that the auction will generate.
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