The process will help determine the market value of the brand and interest among buyers. SBICAP Trustee Company is conducting the exercise on behalf of the consortium of 14 lenders that is looking at recovering nearly R7,000 crore from the airline. State Bank of India (SBI) is the largest lender in the consortium, with an exposure of R1,600 crore. Lenders like Punjab National Bank (PNB) and IDBI Bank have exposures of R800 crore each while Bank of India has an exposure of R650 crore to the air carrier.
“This year, the brand value of the Kingfisher Airlines brand has further deteriorated and is now valued anywhere between R350 crore and R400 crore," said a leading brand consultant who did not wish to be named. Five years ago, the Kingfisher brand was valued at R3,000 crore by audit firm Grant Thornton India. But its valuation nosedived when Kingfisher Airlines reported dismal losses in the last three years.
A Kingfisher spokesperson said the company didn't want to comment on the issue. He, however, said that Kingfisher Airlines will not contest SBICAP Trustee Company’s move to invite expression of interest from parties that are interested to acquire the trademarks of Kingfisher airlines.
The trademarks available for expression of interest include Fly Kingfisher (label), Flying Models, Fly The Good Times, Funliner, Kingfisher (label) and Flying Bird Device.
N Chandramouli, chief executive, Trust Research Advisory, which compiles an annual brand trust report that rates the most trusted brands in the country, said: “SBI has to act very quickly now. Otherwise, the deterioration of the brand will continue. Even now, there's a definite value for the brand existing in consumers' minds due to the residual trust and extraordinary flying experience that the brand has created.” The Brand Trust Report-India Study 2014 brought out by Mumbai-based Trust Research Advisory shows that Kingfisher ranks nowhere among Indian airline operators in 2014.
A year ago, the consortium had recovered around R544 crore by selling pledged shares of United Spirits and Mangalore Chemicals & Fertilizers in the open market. It also began the process of taking possession of Kingfisher House, the grounded carrier's headquarters in Mumbai, which it holds as a collateral along with Vijay Mallya’s villa in Goa. The banks, however, had been restrained from moving against the Goa property by an injunction issued by a local court.
The consortium is separately pressing a winding-up petition against the airline in the Karnataka High Court, which admitted the petition on January 17. Several other creditors have filed similar cases and are pending admission.