SBI may replace HDFC valuers for Kingfisher assets

New Delhi, Sept. 10:  

Miffed with HDFC’s tardy progress in completing the valuation of two pledged properties of Kingfisher Airlines’ (KFA) promoters, State Bank of India (SBI) has decided to get the job done on its own.

India’s largest lender, which leads the 17-bank consortium of lenders to KFA, has now decided to appoint valuers from its own approved panel to speed up the recovery process, sources close to the development said.

At least two valuers are being appointed and they will complete the task before this month end. It would come in handy when the KFA Chairman, Vijay Mallya, is expected to make a presentation to bankers this month-end.

HDFC had been asked to do the valuation of KFA’s two non-core assets — Kingfisher House in Mumbai and promoters’ Villa in Goa, it is learnt. The consortium had in July roped in HDFC to value the two properties and also find a buyer for them. As the banks collectively hold the rights to the two properties, they have a say in their disposal. The 17-bank consortium has a collective exposure of over Rs 7,000 crore to the private carrier. By selling these two non-core assets, the banks were looking to realise about Rs 100 crore. But no headway has been made, which has irked bankers, sources added.

The SBI decision to appoint its own valuers does not mean that HDFC is out of the picture. HDFC will do the valuation and submit its report.

At the recent meeting of the bank consortium, the banks wanted KFA Chairman to make a presentation by this month-end on his plans to revive the airline. If no concrete proposition comes from the KFA Chairman, action will be precipitated, said a banker, adding that legal recourse for recovery will be pursued.

Banks have made it clear that they do not want to take any additional exposure to KFA unless the promoter is able to bring more equity funding, either directly or through investors.

SBI Chairman Pratip Chaudhuri had said banks will not go by promises or projections alone but would like to see action in the form of capital infusion.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/article3882699.ece