SBICAP Trustee Company will hold an e-auction of the Kingfisher Villa in Goa on December 22 for a reserve price of R81 crore. The previous attempt in October had failed owing to lack of interest from prospective buyers.
The last date for submission of bid application documents, EMD amount and KYC documents has been set at December 20 (till 5 pm). Bidders are required to submit 10% of the reserve price or R8.1 crore as the EMD amount. The reserve price has been revised by close to 5% from the previous auction.
Prospective buyers can inspect the property tentatively between Thursday and Friday and again between December 15 and 16.
Kingfisher Villa, owned by United Breweries Holdings, was mortgaged as a collateral for loans given to Kingfisher Airlines. Kingfisher Airlines, which has not flown since October 2012, owes around R6,963 crore to a consortium of 17 bankers which have been trying to partly recover their money by selling securities pledged with them.
These include real estate and shares in multiple group entities. The auction is part of the recovery process of dues from airline’s promoter Vijay Mallya under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
In March and August, e-auction of the Kingfisher House —the corporate office of Kingfisher Airline in Mumbai — failed as no buyer approached SBICAP.
While the first auction had a reserve price of R150 crore, the second auction had set it at R135 crore. The next auction of the property is set to be held on December 19.
The case highlights problems being faced by public sector banks when recovering money from defaulters. Bankers say the legal process is a long and tedious one, adding that promoters often resort to delaying tactics by approaching one court after another.
At present, regulations require state-owned banks to set a reserve price and call an auction to dispose of an asset. If the first auction is not successful, a new reserve price must be fixed and a second auction called before any bilateral negotiation can begin.