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New Delhi: Trouble seems to be mounting for the king of good times, Vijay Mallya. The banks could start selling non-core assets of Kingfisher Airlines once they start the recovery proceedings.

However, the Kingfisher Airlines rubbished the reports terming them as wrong and false.

It said, "It is wrong and false to claim or state that banks have started recovery proceedings after a meeting of the consortium of bankers today. The meeting was scheduled as an update meeting and there was no discussion or commencement of recovery proceedings."

The airline says it has offered to sell the Kingfisher House in Mumbai and Mallya’s villa in Goa to pay off its debt.
"On our own accord, we approached the banks with a proposal to liquidate this unutilised asset," said the Kingfisher Airlines.

"The Kingfisher House in Mumbai has been lying vacant after the staff moved to our new offices at The Qube in Mumbai, and at that time itself, on our own accord, we approached the banks with a proposal to liquidate this unutilised asset and at today’s meeting we raised the issue of this pending approval," the airline spokesperson said in a statement.

The airline says it has offered to sell the Kingfisher House in Mumbai and Mallya’s villa in Goa to pay off its debt.

The development came hours after a group of banks, led by the State Bank of India, met on Thursday morning to review the airline’s financial position.

The much-anticipated meeting between the management of the crippled Kingfisher Airlines with the consortium of 17 banks, which have a combined stressed exposure of over Rs 7,500 crore to airline, on Thursday failed to make any headway.

The meeting, held at the State Bank of India headquarters in Mumbai, was attended by most of the lenders and the airlines’ Chief Executive Officer Sanjay Aggarwal and Chief Financial Officer H G Raghunath.

Though the airline made a presentation, they could not commit on fresh fund infusion, according to bankers.

Lenders’ sources said the meeting could not make any headway as the company could not commit on fresh fund infusion.

They, however, have appointed HDFC Securities to value two of the already pledged properties of Kingfisher – the Kingfisher House in Mumbai, which has a market value of around Rs 90 crore, and a villa in Goa, having a market value of Rs 30 crore.

There was also a discussion on the status of the promoters’ pledged shares. At the meeting today, an option was discussed where the company can go ahead and buyback some of these shares.

Bankers, who have over 20 per cent stake in the airlines following last Corporate Debt Restructuring (CDR), also said they may meet next month.

At the last meeting of the consortium in March, the bankers insisted on the promoters bringing in at least 50 per cent of the fresh funding requirement (around Rs 2,000 crore) as a precondition for any new advances to the airline, after it stopped servicing its loan from January.

Kingfisher has a total outstanding debt of Rs 7,500 crore and an equal amount in accumulated loss.

Out of the total loans, State Bank alone has an exposure of over Rs 1,400 crore, followed by PNB (Rs 700 crore), Bank of Baroda (around Rs 500 crore) and private lender ICICI Bank (Rs 430 crore), which had earlier this week sold its debt to a hedge fund run by Srei Infra.

The carrier has not been paying salaries to employees for the past few months, besides defaulting on tax payments as well as bills to its vendors.

It has been seeking fresh bank funding since last December apart from raising overseas funds. Earlier this week, its pilots went on a strike for a day to demand salaries and dues.

Kingfisher at present has only 15 aircraft flying, including eight ATRs, while 15 of its aircraft are grounded due to non-availability of spares on account of fund crunch.

Its lessors have reportedly taken back as many as 34 aircraft after the company allegedly defaulted on the rentals amounting to around Rs 1,000 crore.