Legal Notice Issued to Kingfisher Airlines by Lenders
Kingfisher Airlines Ltd has received a legal notice from its lenders, warning that their realty assets will be seized if loans are not repaid. The airline had pledged these assets as collateral to secure loans from various banks, with the State Bank of India (SBI) being the largest lender.
Lenders' Plans to Recover Loans
The lenders have clearly stated in the notice that they will take possession of Kingfisher Airlines' realty assets if the company fails to repay its debts. A senior bank executive confirmed that a legal notice has been served to the airline.
Potential Assets to Be Seized
The assets in question include the airline's Mumbai office and a luxurious villa in Goa, owned by its parent company, UB Group. The lenders also plan to take over other properties pledged as collateral, which may include properties of other Kingfisher Group companies and some personal properties of Vijay Mallya, the chairman of Kingfisher Group.
Statements from Bank Officials
Deputy MD at SBI, Shyamal Acharya, confirmed that the lenders intend to take action against other subsidiary companies of the Kingfisher Group.
Kingfisher Airlines' Financial Struggles
Kingfisher Airlines Ltd started operations in 2005 but has never turned a profit since its inception. The airline suspended its services on October 1, 2012. Currently, it owes over $2.5 billion in debts, which need to be paid to its lenders, employees, and the Indian government.
Recent Developments
Due to defaulted payments, the banks have refused to offer further loans to the carrier. This led the Indian Government to cancel their license in 2012. Meanwhile, Royce & Partners Finance Ltd and BNP Paribas have filed petitions against the group in Karnataka High Court, which will hear the petitions today.
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