Lenders to step up pressure on Vijay Mallya for a better offer

Recovery proceeding a to stay on course; lenders to make sure that Mallya does not use delaying tactics

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After rejecting the Rs 4,000-cr repayment offer by the now-defunct Kingfisher Airlines (KAL) and Vijay Mallya, its lenders are working to drive a hard bargain for a better offer which will cover the principal and the interest.

Banks will also increase co-ordination for recoveries through auctions of properties and assets. This is independent of the proceedings in the Supreme Court.

The SC has asked Mallya to disclose his and his family’s assets by April 21.

Senior public sector bank executives said banks today conveyed in the Supreme Court decision to reject offer (Rs 6000 crore) by airline and its promoter. Now, the focus is on negotiation for getting improved offer.

A senior SBI official said that there will be to and fro communication with the airline. While doing talks, lenders would be cautious not to allow delay tactics (on the part of Mallya).

SBI is heading a consortium of lender's to Kingfisher Airlines which owes about Rs 9, 000 crore.

Concurring with the SBI executive, an IDBI Bank official said “this settlement is being dealt in most transparent manner due to public pressure.  So we have stake to get maximum. Negotiation will not be an open ended affair."

As for recoveries are concerned, banks have already put the airline’s headquarters property near Mumbai airport on the block. However, the auction for property failed to get even single bid as reserve price (Rs 150 crore) was seen as steep.

Banks are also auctioning the trademarks and brands of KAL for recovering dues.