to Kingfisher Airlines (KFA) are confident the value of collateral available to them, including guarantees of UB Holdings, promoter Vijay Mallya’s personal guarantee and a few properties, are almost enough to cover the Rs 7,000-crore dues.
SBI Deputy Managing Director Shyamal Acharya said the value of the collateral available was around Rs 6,500 crore, excluding the value of the Kingfisher brand.
The collateral includes tangible properties like helicopters, real estate such as Mallya’s Goa villa and Kingfisher House in Mumbai’s Andheri area, besides corporate guarantees of UB Holdingsand the pledged shares of United Spirits which banks plan to sell by the end of this quarter after transferring those to their names.
At a meeting attended by four members of the lenders’ consortium on Wednesday, a day after the banks decided to recall the loans given to the troubled airline, they also decided to jointly move the debt recovery tribunal to avoid delays.
State Bank of India — the leader of the consortium — has now formed a sub-panel comprising representative from Punjab National Bank, IDBI Bank and Bank of India. “The panel has been set up to take legal advice and initiate appropriate actions for recovery,” Acharya said.
But legal experts say the recovery process is going to be a long one. While the lenders have recourse to KFA’s primary assets, the process of having the guarantor to pay up the loans has to be through a legal process. “The guarantor can surely go in for a stay plea, saying it has not been given enough time, and the process can be protracted,” an expert says.
Another says, statutory dues, including employee provident fund, insurance, service tax and income tax, will have to be cleared before meeting banks’ demands.
The opinion, however, is divided. Some corporate lawyers say banks could invoke the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities (Sarfaesi) Act to recover their funds from Mallya.
“The banks can simply issue a notice to the defaulter and go ahead and sell assets. There is no need to go to the court,” says corporate lawyer R S Loona. As far as pledged shares are concerned, Loona says banks can sell the shares to recover loans, without taking recourse to the Sarfaesi Act.
http://www.indiaeveryday.in/finance/fullnews-kfas-collateral-enough-to-cover-dues-say-banks-1023-5096661.htm
SBI Deputy Managing Director Shyamal Acharya said the value of the collateral available was around Rs 6,500 crore, excluding the value of the Kingfisher brand.
The collateral includes tangible properties like helicopters, real estate such as Mallya’s Goa villa and Kingfisher House in Mumbai’s Andheri area, besides corporate guarantees of UB Holdingsand the pledged shares of United Spirits which banks plan to sell by the end of this quarter after transferring those to their names.
At a meeting attended by four members of the lenders’ consortium on Wednesday, a day after the banks decided to recall the loans given to the troubled airline, they also decided to jointly move the debt recovery tribunal to avoid delays.
State Bank of India — the leader of the consortium — has now formed a sub-panel comprising representative from Punjab National Bank, IDBI Bank and Bank of India. “The panel has been set up to take legal advice and initiate appropriate actions for recovery,” Acharya said.
But legal experts say the recovery process is going to be a long one. While the lenders have recourse to KFA’s primary assets, the process of having the guarantor to pay up the loans has to be through a legal process. “The guarantor can surely go in for a stay plea, saying it has not been given enough time, and the process can be protracted,” an expert says.
Another says, statutory dues, including employee provident fund, insurance, service tax and income tax, will have to be cleared before meeting banks’ demands.
The opinion, however, is divided. Some corporate lawyers say banks could invoke the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities (Sarfaesi) Act to recover their funds from Mallya.
“The banks can simply issue a notice to the defaulter and go ahead and sell assets. There is no need to go to the court,” says corporate lawyer R S Loona. As far as pledged shares are concerned, Loona says banks can sell the shares to recover loans, without taking recourse to the Sarfaesi Act.
http://www.indiaeveryday.in/finance/fullnews-kfas-collateral-enough-to-cover-dues-say-banks-1023-5096661.htm
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