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Loan Recovery: Banks take over Kingfisher House worth Rs 100 crore in Mumbai

The consortium of bankers may initiate auction of the property soon.

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The 17-bank consortium led by State Bank of India (SBI) on Tuesday took possession of the Kingfisher House, estimated to be worth around Rs 100 crore. This is part of the lending consortiums' efforts to recover the Rs 6,800 crore loan they had granted to the grounded Kingfisher Airlines.

The consortium of bankers may initiate auction of the property soon.

Real estate officials said the 17,000-sq ft property at Vile Parle, near Mumbai's domestic airport, is likely to fetch over Rs 100 crore. The other collateral left with the banks is Kingfisher Villa in Goa, which has a market value of around Rs 90 crore.

Kingfisher Airlines, once a lead­ing carrier with world-class facili­ties, was grounded more than two years ago for want of finance. The company last reported its fi­nancial results for the three months ended December 2013.

The airline said in a statement that it handed over possession of its property, Kingfisher House, to SBICAP Trustee, a security trustee for the consortium of the Kingfisher lenders. This is "without prejudice to all of the rights, remedies and contentions of the company including the right to file appropriate proceedings to challenge the said order dated February 12, 2015," Kingfisher said, according to a PTI report.

The order had allowed the banks to take over the possession as part of their recovery process, which they had started way back in February 2013 after the airline stopped servicing the debt. Kingfisher House is one of the prime real estates of the airline, which was once touted as the most luxurious carrier in the country and one of the crown jewels of Mallya-led UB Group.

In January 2014, the high court ad­mitted a winding-up petition filed by the SBI-led consortium of lend­ers, which claimed dues of Rs 6,200 crore. The petition had sought liq­uidation of the airline. Its debt had touched Rs 7,500 crore by 2012. As the airline business continued to guzzle cash, it be­came unprofitable to run the air­line and the operations came to a halt in October 2012 while its flying permit was cancelled in December that year. Among the big lend­ers to Kingfisher are SBI (Rs 1,400 crore), PNB (Rs 700 crore), Bank of Baroda (Rs 500 crore) and ICICI Bank (Rs 450 crore)

When asked about the status of the Income Tax and Service Tax Departments' claim on the same property, SBI's deputy managing director & group executive for Stressed Assets Management Parveen Kumar Malhotra told PTI that the banks have to discuss that with the tax authorities and a decision would be taken only after that.

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