Lenders start valuation of Mallya's Kingfisher Villa

In March this year, the banks tried to sell the Kingfisher House in Mumbai to recover a part of their dues.

Lenders of Kingfisher Airlines have begun the process of valuation of its Villa in Goa. They had taken the physical possession of it last month after a long legal battle.

The process of arriving at a commercial value for the villa is likely to be completed in a few days, after which the lenders will put it on sale. This is as part of the efforts to recover Rs 9,000 crore (Rs 90 billion) dues from the airline.

"Authorised independent valuers are assessing the property. They are likely to complete the exercise in the next few days and will submit the report," a banking source said.

"The reserve price will be based on the report. The decision on the auction date will be taken afterwards," said another banker.

The villa near the Condolim beach in north Goa, owned by United Breweries Holdings, was mortgaged by the now defunct Kingfisher Airlines to a consortium of 17 banks to obtain loans in 2010. At that time it was valued at Rs 90 crore (Rs 900 million).

In March this year, the banks tried to sell the Kingfisher House in Mumbai to recover a part of their dues. The property could not attract any bidders due to a high reserve price of Rs 150 crore (Rs 1.5 billion).

In April, the lenders again attempted to auction brands and trademarks of Kingfisher Airlines but it also turned out to be a failure with the Rs 367 crore (Rs 3.67 billion) reserve price.

Last month, North Goa collector Neela Mohanan had given an order in favour of the banks to take the physical possession of the villa, on which United Spirits had claimed tenancy rights.

SBI Cap Trustees finally took the possession of the posh property on May 12.

The villa was once used by beleaguered Vijay Mallya to host lavish parties during his 'good times'.

The villa would be the second immovable property which the 17-lender consortium led by State Bank of India will put on sale.

So far, banks have recovered over Rs 1,400 crore (Rs 14 billion) by selling shares and collaterals and over Rs 1,200 crore (Rs 12 billion) are blocked in escrow accounts at Debt Recovery Tribunal, Bengaluru, and the Karnataka High Court.

Mallya had told the Supreme Court he was ready to repay up to Rs 6,800 crore (Rs 68 billion) of the total dues of over Rs 9,400 crore (Rs 94 billion).

Photograph: Reuters