Kingfisher House: Bidders remain elusive; auction may fail

The auction of Kingfisher House, which has a built-up area of over 17,000 sq ft and is located in the plush Vile Parle area, is scheduled to begin at 1100 hrs on August 4

The proposed auction of Kingfisher House, the erstwhile headquarters of Vijay Mallya-led group's long-grounded airline, may prove to be a damp squib yet again tomorrow as bidders have remained elusive even at a reduced reserve price of Rs 135 crore (Rs 1.35 billion).

This is the second attempt by the banks to recover part of their unpaid loans from Kingfisher Airlines through auction of this prime office property near domestic airport in Mumbai, after not even a single bidder turned up at an earlier auction in March at a reserve price of Rs 150 crore (Rs 1.5 billion).

Sources said same fate awaits for the one-hour auction scheduled for tomorrow, as not even a single bidder deposited the earnest deposit money within the deadline of August 1.

Besides, the still high reserve price, the numerous legal issues facing the group may also be keeping the bidders away.

Kingfisher House is just one of the several properties, together worth over Rs 700 crore (Rs 7 billion) that lenders and the tax department will put under hammer this month to recover part of their outstanding dues totalling thousands of crores of rupees from the airline.

The auction of Kingfisher House, which has a built-up area of over 17,000 sq ft and is located in the plush Vile Parle area, is scheduled to begin at 1100 hrs on August 4.

The 17-bank consortium, led by State Bank of India, revalued the property in May and reduced the reserve price by 10 per cent to Rs 135 crore, after they failed to attract a single bidder during the earlier auction in March.

The airline, owned by beleaguered Vijay Mallya, who left the country on March 2, using his diplomatic passport, owes over Rs 9,000 crore (Rs 90 billion) including penal interest to banks.

Mallya's luxurious personal jet along with everything inside that include cushy couches and even a bathrobe will be auctioned by the service tax department on August 18.

Photograph: Danish Siddiqui/Reuters