Setback to Banks: Auction for Kingfisher House Fails

RSTV Bureau
The auction for Kingfisher House in Mumbai failed to win a single bid. File Photo of Vijay Mallya, Founder of now defunct Kingfisher Airline.

The auction for Kingfisher House in Mumbai failed to win a single bid. File Photo of Vijay Mallya, founder of now defunct Kingfisher Airline.

In a big setback to the public sector banks in their effort to recover money from now defunct Kingfisher Airlines, the auction of the Kingfisher House, the airline’s headquarter in Mumbai turned out to be a flop show.

State Bank of India supervised auction failed to elicit any bides from prospective buyers, partly due to high reserve price of Rs. 150 crore and also due to fears of litigation.

The auction of the property, with a built-up area of over 17,000 sq ft in Vile Parle area near domestic airport here, started at 1130 hrs and ended in about an hour with no success.

“There were no bidders. I think the higher reserve price was the reason for it,” said an official involved with the auction conducted by SBI Caps for a consortium of banks led by public sector lender State Bank of India.

The reserve price for Kingfisher House was set at Rs 150 crore, which bidders found to be very high, he added.

The 17-member consortium, which had given loans to Kingfisher Airlines, will soon have a review meeting and may discuss the reserve price as well, sources said.

The online auction was held by SBICAPS Trustee, a subsidiary of SBI Caps.

Lenders had taken over Kingfisher House in February last year in a bid to recover part of their dues totalling over Rs 9,000 crore, which includes unpaid loans and accrued interest.

The auction was conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002.