Mallya’s .₹ 4kcr Offer Doesn’t Interest Banks
17-member group wants double, .₹ 4,900 cr upfront plus interest
Mumbai: Vijay Mallya needs to double the settlement offer he’s made to the17-lender group that’s seeking repayment of more than .₹ 9,000 crore in dues stemming from loans made to Kingfisher Airlines, the grounded carrier founded by him.
The .₹ 4,000-crore offer presented in the Supreme Court last week isn’t good enough in the view of the banks, said two people familiar with discussions among lenders on Saturday. The confidential proposal included payment of .₹ 2,000 crore by September and the rest subject to conditions. The bankers have to respond to the proposal at the next Supreme Court hearing scheduled for April 7.
“Lenders have decided that they want a minimum of .₹ 4,900 crore to be paid upfront, which is the principal loan amount. Further, they would demand interest component as well,” said one of those cited above. ₹ ₹
Bankers are proceeding on multiple fronts, including trying to dispose of assets that Mallya had pledged to recover dues
“Most importantly, we also want cash on the table and we do not want to operate as their recovery agent,’’ said the person.
Much of the proposal is strewn with caveats, raising doubts about whether the assets will actually yield the amounts stated, said the bankers, who didn’t want to be named. It suggests that shares of companies pledged against loans be sold off. From this, banks will be able to get about .₹ 2,000 crore after paying off those who loaned money against the equity. It’s not clear whether these are shares the banks are already claiming as part of guarantees provided by United Breweries Holdings Ltd.
SBI heads the group of 17 lenders fighting more than 20 cases in various courts and debt recovery tribunals across the country after Kingfisher Airlines collapsed in 2012 owing about .₹ 7,000 crore. Banks have come under pressure to prove they are actively trying to recover loans amid public anger and are tightening the screws on Mallya, who’s currently said to be in the UK after having left the country last month. The banks have sought his return to India as has the Enforcement Directorate, which wants to question him over accusations of money laundering. It has asked Mallya to present himself on April 9 after having failed to appear on April 2. The CBI is meanwhile looking into whether bankers compromised on lending norms while restructuring the Kingfisher Airlines loans.
Mallya has consistently defended himself against accusations of wrongdoing and said he’s the victim of a media campaign. Bankers are proceeding on multiple fronts, including trying to dispose of assets that Mallya had pledged to recover dues. A bid to sell the airline’s headquarters in Mumbai failed, with experts saying the reserve price was too high.
They recently put on sale the Kingfisher logo, which includes the representation of the bird that is supposedly the most valuable item among the assets.