Banks set to reject Mallya's loan repayment offer

Vijay Mallya, once known as the ‘King of Good Times’, left India on March 2 as Kingfisher's creditor banks stepped up pressure on him.

A group of Indian lenders is set to reject businessman Vijay Mallya's offer to repay Rs 4,000 crore ($600 million), less than half of what his defunct Kingfisher Airlines owes them, sources with knowledge of the matter said.

The lenders, led by State Bank of India (SBI), are due to inform the Supreme Court of their decision on the offer at a hearing on Thursday.

A senior SBI executive overseeing its stressed-assets management unit declined comment when asked about the banks' decision. A spokesman for Mallya's UB Group also said he would not comment.

Kingfisher, which ceased operations in October 2012, owed the banks, mostly state-run, Rs 9,091 crore (Rs 90.91 billion) including interest and fees as of last November, the government has said.

A lawyer for Mallya told the Supreme Court last week that the former billionaire planned to repay Rs 4,000 crore (Rs 40 billion) to the banks by September, and Rs 2,000 crore (Rs 20 billion) more if Kingfisher wins a lawsuit seeking damages from a plane engine-maker.

The court had sought the response of the banks on Mallya's offer within a week.

Mallya, once known as the ‘King of Good Times’, left India on March 2 as Kingfisher's creditor banks stepped up pressure on him.

His whereabouts since then have not been disclosed.