Mallya fights to retain Goa villa, Mumbai office

TOI

MUMBAI: 6 July 2012: Kingfisher Airlines is fighting to retain ownership of its corporate office in Mumbai and Vijay Mallya’s luxury villa in Goa, which lenders are threatening to put on the block to recover overdue loans from the troubled airline.

 

These two non-core assets have come into focus following a meeting of 17 lenders, whom Kingfisher owes around Rs 7,000 crore. Bankers said that HDFC has been appointed to conduct a valuation of these two properties. The two-storied corporate office is close to the domestic air terminal, while the sprawling Kingfisher Villa is next to Fort Aguada in north Goa.

 

"Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilized asset and, at today’s meeting, we raised the issue of this pending approval," said a Kingfisher spokesperson in an emailed statement.

 

However, a subsequent SMS said that Kingfisher has approached the consortium to remove KF Villa Goa and KF House Mumbai from the security package against payment of full value assigned to these assets. It added that the banks had not asked the airline to liquidate any asset.

 

The pooled collateral with lenders as of November 2011 included assignment of the Kingfisher brand, valued at Rs 4,111 crore (according to an April 2010 Grant Thornton report), Kingfisher House in Mumbai that was valued at Rs 81.6 crore, Kingfisher Villa Goa valued at Rs 36 crore and hypothecation of two helicopters valued at Rs 90.22 crore. Besides these, there are other securities that include guarantees from United Breweries and Vijay Mallya.

 

In Thursday’s meeting with the lenders, Kingfisher officials spoke about the likelihood of foreign direct investment being allowed in aviation, which it said would pave the way for bringing in foreign investors into the airline. But lenders said there was no new viable proposal from the management. At the same time, bankers said that they were not keen on effecting recovery proceedings as this would bring operations to a halt, which is why the focus is now on ’non-core’ assets. Although lenders do have securities from the liquor business, it is not enough to cover the entire debt.