Tuesday 23 April 2013

End of the road for Kingfisher? Banks to start stripping down KingFisher airline's assets






MUMBAI: The final end game for cash-strapped Kingfisher AirlinesBSE -2.00 % has begun. Lenders to the troubled airline will file the case in the debt recovery tribunal (DRT) and serve the SARFAESI notice this week, according to sources close to the development.

Following this, bankers will start the process of actually stripping down the airline's assets and selling them to recover their dues.

The consortium will now start the process of selling the physical assets of the company which includes the office spaces in Mumbai and a villa in Goa. Banks have already started selling the pledged shares of United SpiritsBSE 0.04 % as well as Kingfisher Airlines.

According to sources in the know, banks will also now start invoking the corporate guarantee of UB Holdings as well as the personal guarantee of Vijay Mallya. The value of both these guarantees totals to Rs 3000 crore.

Kingfisher owes the consortium of banks over Rs 7500 crore and the value of the collateral totals to around Rs 6500 crore. Last week, SBIBSE -1.61 % chairman Pratip Chaudhuri said that the lenders weren't interested in any revival plan that the airline had to offer. "We have given them enough time. We will not spare any recourse in out recovery efforts," said Mr Chaudhuri

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