SBI-led consortium to auction assets of Kingfisher Airlines for dues recovery
The State Bank of India led consortium of lenders to the defunct Kingfisher Airlines Ltd (KAL) will e-auction movable assets of the Vijay Mallya-controlled company in Mumbai as a step to recover dues of over Rs 6,993 crore.
The movable hypothecated assets of KAL are located at Chhatrapati Shivaji International Airport, Mumbai. The assets include forklifts, tractors and vehicles. The auction is slated for December 7, 2015 with reserve price of just Rs 65 lakh, according to notice by SBI Cap Trustee Company Ltd (SBICTCL).
SBICTL is acting as security trustee for credit facilities sanctioned by lenders. United Breweries (Holdings) Ltd and Vijay Mallya, against whom many lenders have begun process to declare him as wilful defaulter, are guarantors. The KAL account is already a non-performing asset in books of the banks. They have already made NPA provisions according to regulatory norms and have taken possession of "Kingfisher House", the airline's headquarters
An IDBI Bank executive said though recovery is happening for banks through SBI as leader of consortium, each lender has to separately carry out process for declaring borrower as wilful defaulter. IDBI Bank is one of the lenders to KAL and has commenced legal process for recovery.
According to Reserve Bank of India's rules, a 'wilful default' would be deemed to have occurred only when the borrower has defaulted in meeting payment / repayment obligations to the lender even while having the capacity to repay.
The identification of the wilful default should be done by factoring in the track record of the borrowers and should not be decided on the basis of isolated transactions / incidents.
Source :Banking Updates
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