Kingfisher lenders invoke Mallya's personal guarantees

Lenders, led by SBI, have begun recovery proceedings, said a senior bank official

Stepping up their drive to recover dues from the ailing Kingfisher Airlines (KFA), lenders to the airline on Thursday invoked personal guarantees issued by Vijay Mallya, the promoter of the airline.

According to a senior public sector bank executive, following the decision to recall loans, lenders led by the State Bank of India have begun recovery proceedings.  It will be difficult to put value to the personal guarantees of Mallya due to legal and technical complexities, the bank official added.

According to another official, the value at end of March 2010 was about Rs 1,500 crore.

Kingfisher’s stock was trading 3.2 per cent lower at Rs 6.97 on Thursday, over the previous close on the Bombay Stock Exchange. The dues from Kingfisher to its lenders’ are in excess of Rs 7,500 crore.

Banks have already sold shares of United Spirits and Mangalore Chemicals.