The lenders, who have taken posession of the property, are expected to invite bids from potential buyers in a couple of days.
The Kingfisher House in Mumbai, the headquarters of Vijaya Mallya's once high-profile airline Kingfisher Airlines, will be auctioned shortly.
The lenders, who have taken posession of the property, are expected to invite bids from potential buyers in a couple of days.
This will be the first headway that bankers will have in the long-standing battle with the 'king of good times', being fought through various courts by a consortium of 17 banks led by the State Bank of India (SBI).
Lenders expect to get around Rs 100 crore from the sale as the real-estate market continues to be down.
A banker, who is privy to the dealings in the account, said: "We will be auctioning the property and will shortly issue advertisements inviting bids for the property. We expect to recover a sizeable amount of money from the sale."
Real-estate officials said the 17,000-sq ft property at Vile Parle, near Mumbai's domestic airport, is likely to fetch over Rs 100 crore. The other collateral left with the banks is the Kingfisher Villa in Goa, which has a similar market value of around Rs 100 crore.
After the income-tax department went to court staking claims to part of the money recovered, the court had ruled last year that the tax department's claims should also be considered. So bankers and I-T officials formed a committee to preside over the sale of the property.
At a time when bad loans are biting into the profitability of lenders, a big recovery from a corporate account is certainly a positive development for banks which are aggressively pursuing defaulters, particularly the big defaulters who have the clout and the money power to put hurdles on banks' efforts.
In 2014, the airline, after a court ruling, said in a statement that it handed over possession of its property, Kingfisher House, to SBICAP Trustee, a security trustee for the consortium of Kingfisher lenders.
The lenders recovered over Rs 600 crore from the sale of United Spirits shares pledged with them.
In January 2014, the Bombay High Court admitted a winding-up petition filed by the SBI-led consortium of lenders, which claimed dues of Rs 6,200 crore. The petition had sought liquidation of the airline. Its debt had touched Rs 7,500 crore by 2012.
Even as the airline business continued to guzzle cash, Kingfisher had bought out Air Deccan before the downfall began.
It suddenly became unprofitable to run the airline and the operations came to a halt in October 2012 while its flying permit was cancelled in December that year. Among the big lenders to Kingfisher are SBI (Rs 1,400 crore), PNB (Rs 700 crore), Bank of Baroda (Rs 500 crore) and ICICI Bank (Rs 450 crore, which was later sold to SREI Infrastructure).
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