Lenders to take call on KFA property soon

Written by fe Bureau | Mumbai | Updated: Dec 13 2013, 09:27am hrs
With the Karnataka High Court having rejected Kingfisher Airlines' plea to restrain bankers from taking over the Kingfisher House in Mumbai, lenders to the company will now move ahead with the recovery process.

"It is definitely a good development for us because now we can take possession of the property and get some part of the funds recovered. However, we are still waiting for the lead bank to decide on the future course," said a senior official of a public sector bank.

State Bank of India (SBI), which is the consortium leader, had initiated the procedure for taking over the Mumbai-based property earlier this year under the Sarfeasi Act. However, the United Breweries (UB) Group had sought intervention by the Karnataka High Court, questioning the consortium's move to take over Kingfisher properties, while filing a winding up petition against the company at the same time.

The UB Group had first filed its application in the high court, asking for a restriction on the recovery procedures initiated by the consortium. The court had given an interim stay order, giving Kingfisher Airlines more time to restart its operations.

The consortium of lenders had started recovery procedures, through SBI, by first selling the shares of United Spirits, a company of the UB Group, which were pledged to them. Banks, however, are still looking to recover nearly R6,203 crore from the company.

Meanwhile, last month, a Goa court directed the consortium to maintain status quo on an injunction on the Kingfisher villa in Goa after they made an attempt to take possession of the property. Bankers said that no further progress has been made in the case of the Goa property.

The Karnataka High Court recently admitted a winding-up petition filed against the airline by Aerotron, a UK-based aviation services firm, which is claiming dues of $6 million. Aerotron is among several companies who have filed winding-up petitions in the Karnataka High Court. Last month, corporate banker BNP Paribas' winding-up petition against Kingfisher Airlines was also admitted by the Karnataka High Court, over unpaid dues of nearly R200 crore. In a recent submission to the court, KFA, which has been grounded for more than a year, has estimated its assets to be worth a little less than R612 crore, including the Mumbai headquarters. The airline had reported a net loss of R716 crore in the quarter ended September.