A legal notice has been sent to the Kingfisher Airlines Ltd by its lenders, stating that they will snatch the realty assets if the loans are not repaid.
For attaining loans from banks and other lenders, Kingfisher Airlines Ltd has submitted its realty assets as collateral. State Bank of India is the largest lender to the airlines.
Stating this, the lenders have already sent a legal notice to Kingfisher Airlines. The notice say clearly that the lenders will snatch the realty assets of Kingfisher Airlines in case if the company fails to repay the amounts taken.
We, the lenders, have served a legal notice to Kingfisher Airlines, said a senior bank executive.
The lenders also have plans to take over other properties given as collateral. These will include the properties of other Kingfisher Group companies and some personal properties of Vijay Mallya, the chairman of Kingfisher Group.
Deputy MD at SBI, Shyamal Acharya confirmed that the lenders have plans to move against the other subsidiary companies of Kingfisher Group.
The realty assets of Kingfisher Airlines include its Mumbai office and a posh villa in Goa. The villa is owned by UB Group, its parent company. Earlier the banks sold the UB shares, with the permission of HC. However, no UB Group spokesperson was available for comment.
Kingfisher Airlines Ltd started operations in 2005. The group could never make any profit since its inception and was finally stopped service on October first last year.
Now the carrier owes over $2.5 billion. The debt-driven carrier now has to pay huge amounts to its lenders, other than its employees and the Indian government.
As the carrier defaulted payments, the banks refused to offer them more. This led the Indian Government to cancel their license in last year.
While the creditors of Kingfisher Airlines plan to divest these realty assets to clear off the debts, Royce & Partners Finance Ltd and BNP Paribas have filed petitions against the group in Karnataka HC which will hear the petitions today.