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July 5: A consortium of 17 lenders to Kingfisher Airlines is mulling the sale of the debt-ridden carrier’s two properties in Mumbai and Goa even as the airline’s employees have threatened to stop working from Friday if they are not paid salaries and dues by Thursday night.
The asset sale will help the lenders to recover a part of the outstanding loans worth over Rs 7,500 crore.
The banks, which include the State Bank of India (SBI), Bank of Baroda, Punjab National Bank, Uco Bank and IDBI Bank, are believed to have appointed HDFC Securities to carry out a valuation of these properties.
The lenders expect to raise around Rs 120 crore through the sale of these properties.
The move to monetise the two properties was discussed at a meeting between the lenders and the company at the SBI headquarters here today.
Sources said the airline’s property in Mumbai — Kingfisher House — has a market value of around Rs 90 crore, while the villa in Goa is valued at over Rs 30 crore.
However, Kingfisher Airlines denied that its bankers had initiated any recovery proceedings. The airline maintained that it only had proposed to sell the property in Mumbai.
“It is patently wrong and false to claim or state that banks have started recovery proceedings after a meeting of the consortium of bankers today… Kingfisher House has been lying vacant after the staff moved to our new offices at The Qube in Mumbai. At that time itself, and on our own accord, we approached the banks with a proposal to liquidate this unutilised asset. In today’s meeting, we raised the issue of this pending approval,” the airline said.
It added that today’s meeting was a pre-scheduled one to update the lenders and that there was no discussion on the commencement of recovery proceedings.
Kingfisher Airlines has been classified as a non-performing asset by lenders such as the State Bank of India. The airline had a debt of Rs 7,500 crore from 17 lenders led by the SBI, which alone has an exposure of over Rs 1,400 crore.
At the meeting today, bankers reportedly gave the management 15 days to come up with concrete steps to improve operations.
Meanwhile, the impasse over the non-payment of salaries to employees since February failed to make any headway.
Sources said the employees had met chief executive officer Sanjay Aggarwal, executive vice-president Hitesh Patel and chief financial officer A. Raghunathan, but the talks seemed to have been futile.
The directorate general of civil aviation (DGCA) is keeping a close watch on the beleaguered airline. “The DGCA will act if KFA (Kingfisher Airlines) is unable to keep its commitment. But for now they are on a wait and watch mode,” said a civil aviation ministry official.
The carrier has not been paying salaries to employees for the past few months, besides defaulting on tax payments as well as bills to its vendors.
It has been seeking fresh bank funding since December apart from raising overseas funds.
At present, Kingfisher has only 15 aircraft flying, including eight ATRs, while 15 of its aircraft are grounded because of non-availability of spares on account of a fund crunch.
Its lessors have reportedly taken back as many as 34 aircraft after the airline allegedly defaulted on rentals amounting to around Rs 1,000 crore.
The airline suffered a loss of Rs 2,328 crore in 2011-12 against Rs 1,027 crore in the preceding year. It has not made a profit since its inception in May 2005.
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