Banks to auction Kingfisher Airlines ground support equipment

By: |
Mumbai | Published: July 7, 2015 12:17:00 AM

State Bank of India, which leads a consortium of lenders to Kingfisher Airlines, is planning to auction the carrier’s ground support equipment...

State Bank of India, which leads a consortium of lenders to Kingfisher Airlines, is planning to auction the carrier’s ground support equipment on the premises of Mumbai International Airport (MIAPL), sources told FE.

Ground support equipment is the support equipment found at an airport used to service the aircraft between flights.

Among other things, KFA ground equipment includes nine vehicles, a banker said. He added that these equipment are on MIAPL premises and they were initially reluctant to let SBI access these assets. “MIAPL also said it will auction those assets to recover their dues from KFA,” he added.

The bank had then approached the debt recovery tribunal and got an order restraining MIAPL from selling the assets. This order was later challenged in the Karnataka High Court. “The court allowed SBI two months to take possession of the assets and auction them,” he said, adding that the bank will get the equipment valued by a registered valuer.

Meanwhile, the banker said, the auction of the Kingfisher House in Mumbai will happen soon as the Karnataka High Court has, in an interim order, allowed the bank to auction the property while associating the income tax department with the process. “We have the right to auction KFA assets but there is no judgment yet on who will get the proceeds,” he said.

Lenders to Kingfisher have not been able to recover their loans and their efforts have met with multiples hurdles. Kingfisher House is among the assets pledged by the company to a consortium of 17 banks. In 2013, the I-T department moved a Bangalore court asking lenders to first settle the dues of the department amounting to R350 crore as the property was attached under the I-T Act.

The villa in Goa is also in dispute as United Spirits has claimed it was a tenant there since 2005 and, therefore, banks cannot sell it without its approval. Recently, the district magistrate admitted the plea of USL against SBI and other lenders.

Kingfisher Airlines, which has not flown since October 2012, owes over R7,000 crore to bankers who have been trying to recover their money by selling securities pledged by the firm. These include real estate and shares in multiple group entities. Banks had also sold around 4 lakh shares of USL pledged with them for R104 crore.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1All India Radio launches nationwide talent hunt show ‘Adi Swar’
2Streaks launches app on Android based on Jerry Seinfeld method; helps users stick with habits
3Polaroid Flips the Switch on Pre-Orders for the Next Generation Polaroid Cube