Kingfisher Airlines fails to repay loan, SBI Cap confiscates properties

SBI Cap Trustee Company Limited, the wholly owned subsidiary of SBI Capital Markets Limited, has confiscated Vijay Mallya’s defunct carrier Kingfisher Airline’s office property in Mumbai. The investment banking subsidiary of SBI Capital, took possession of the property after Vijay Mallya failed to repay the debt to the value of Rs 6027.42 crore.

The company had issued a demand notice to the airline and its directors, on May 3, 2013 under Section 13 (2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

“… Calling upon the borrowers, Kingfisher Airlines Limited…and the guarantors-- United Breweries (Holdings) Limited (UBHL) having registered office at UB Towers and Vijay Mallya residing in UB Towers to repay the amount mentioned in the notice being Rs 6,027.42 crores and interest thereon with 60 days from the day of notice,” stated the notice issued on February 24, 2015.

“The Borrowers and the guarantors having failed to repay the amount notice is hereby given to the Borrower/Guarantors and the public in general that the undersigned has taken possession of the property described herein below as per Hon’ble Chief Metropolitan Magistrate Court Order dated February 12, 2015 and in exercise of the power conferred upon him under Section 13 (4) of the said Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002… The borrower in particular and the public in general is hereby cautioned not to deal with the property and any dealings with the property will be subject to the charge of the SBI Cap Trustee Company for an amount of Rs 6, 027.42 crore,” it added.

The firm has attached two properties in Mumbai, which include Kingfisher House spread over an area of 1,586.24 square meters as well as another property measuring 2401.70 square meters.

Kingfisher Airline has an overall outstanding debt of nearly Rs 7,000 crore and lost its Scheduled Operator’s Permit permanently on January 1, 2015.