Lenders to Kingfisher Airlines on Thursday gave the airline 15 days to come up with a plan outlining how it was going to pay back its loans even as they sought to recover $25 million by selling its property in Goa and Mumbai.
The airline, which reported a R2,328-crore loss in 2011-12, owes a consortium of banks R8,022 crore. As of June 23, lenders hold 14.38% in Kingfisher worth R138.89 crore as per Thursday?s closing share price of R11.94. Earlier this week, ICICI Bank sold its R430-crore exposure to the carrier to a fund run by Srei Infrastructure.
A senior banker told FE: ?The company has been given a fortnight to outline the steps taken so far to improve operations and how they propose to service loans.? Meanwhile, lenders are looking to recover approximately R135 crore by selling the airline’s former offices in Mumbai, Kingfisher House and Vijay Mallya?s villa in Goa.
?We have told them they need to put these on the block and they have agreed,? a senior banker said, pointing out that banks needed to start monetising some assets. Kingfisher, however, denied that bankers were forcing them to sell property. ?The meeting was scheduled as an update meeting and there was no discussion on the commencement of recovery proceedings,? the airline said in a statement.
?Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai,? the statement added.
?At that time itself, on our own accord, we approached banks with a proposal to liquidate this unutilised asset,? the statement said. ?At today?s meeting, we raised this issue pending approval.? The airline now operates only a third of its flights compared with last summer with 120 flights a day using 16 planes. Its market share is now the lowest among domestic airlines with just 5.2% market share as of May 2012.
Lenders have appointed a valuation expert to ascertain the value of not just Kingfisher House but also Vijay Mallya?s villa in Goa, which is reportedly worth Rs 30 crore. The airline has collateralised all its present and future assets, its former office Kingfisher House in Andheri Mumbai, Vijay Mallya?s villa in Goa, two helicopters, the entire of promoters? holdings in Kingfisher Airlines and the airline’s ? stake in parent United Breweries (Holdings) Ltd?s other subsidiaries.
UP IN THE AIR
* Lenders hold 14.38% in Kingfisher Airlines worth R138.99 crore
* Lenders seek to value Kingfisher House, Mallya?s villa in Goa
* Around R135 cr could be recovered by selling these two properties
* Kingfisher, which posted a R2,328-cr loss, owes lenders Rs. 8,022 cr