Mallya Likely to Make Revised .₹ 6,000cr Offer for Settlement
He may propose to make staggered payments till Sept, but banks want the .₹ 4,900cr principal immediately
Kala Vijayraghavan & Saloni Shukla
Mumbai: Vijay Mallya may make a revised .₹ 6,000-crore settlement offer to banks looking to recover .₹ 9,000 crore in dues stemming from loans to Kingfisher Airlines founded by the businessman, who faces the threat of having his passport cancelled. The new offer is said to involve staggered payments till September, said two people aware of the matter. The banks though want the .₹ 4,900 crore principal immediately followed by the interest repaid in staggered amounts, banking executives said. The Supreme Court had asked Mallya last week to disclose all his assets after the banks rejected previous settlement offers as being too little and overladen with conditions. Mallya has to reply by April 21 and the banks are to respond to his offer by April 25, ahead of the next Supreme Court hearing on the day after. There was no response to an email sent to Mallya, who left India for the UK in March.
Mallya had initially offered to pay Rs 2,000 crore upfront and a similar amount by Sep- tember. He had said another Rs 2,000 crore might be paid depending on the outcome of a case Kingfisher Airlines had filed against an aircraft engine company.
“We are expecting a renewal of the earlier offer, but it has to come with clear timelines of payment. We won’t entertain ifs and buts,” a senior banker told ET. “We rejected the earlier offer because a lot of conditions were laid down; it looked like a spider’s web.”
State Bank of India heads the group of 17 lenders that have been fighting more than 20 cases in various courts and debt recovery tribunals across the country after Kingfisher Airlines collapsed in 2012. “We want him to cough up cash along with a clear list of assets or shares that will be sold to repay the loans, and it has to be adequate,” another banker said.
What could complicate matters is Mallya being summoned by the Enforcement Directorate (ED) to answer questions related to accusations of money laundering. ED has thrice summoned Mallya to no avail — on March 18, April 2 and April 9. While the businessman has sought a reprieve until next month, ED now wants his passport revoked. Mallya may seek assurances on this front. “It would be ridiculous if he offers to come down to the country as per SC strictures but ED looks at seizing his passport or detaining him,” said a lawyer not associated with the case. The lenders had told the SC they were open to a negotiated settlement but have insisted that Mallya needs to be present for talks on the matter. “ED had said they would seek non-bailable warrant if he doesn’t turn up, but clearly it is the SC which decides what is in the best interest of the country. It makes better sense to recover the money from Mallya rather than get into a legal tangle,” said another expert.
Bankers have, meanwhile, been proceeding on multiple fronts against Mallya. Their attempt to sell the airline’s headquarters in Mumbai failed — experts said the reserve price was too high.