Banks Set To Reject Mallya’s Rs 4,000 Crore Loan Repayment Offer: Report

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A group of banks are reportedly rejecting businessman Vijay Mallya’s offer to repay Rs 4,000 crore ($600 million), less than half of what his defunct Kingfisher Airlines owes them, according to news agency Reuters which cited unnamed sources.

The lenders, led by State Bank of India (SBI), are due to inform the Supreme Court of their decision on the offer at a hearing on Thursday.

A senior SBI executive overseeing its stressed-assets management unit declined comment when asked about the banks’ decision. A spokesman for Mallya’s UB Group also said he would not comment.

Kingfisher, which ceased operations in October 2012, owed the banks, mostly state-run, over a billion dollars or Rs 9,091 crore  including interest and fees as of last November.

Mr Mallya flew to London last month, and has refused so far to return for interrogation to Mumbai.  His lawyers say that he has spoken to his lenders via video conference, which means he is available and not absconding.  It was through a video call that Mr Mallya, 60, offered to pay Rs 4,000 crore by September, with another Rs 2,000 crore if Kingfisher wins a lawsuit seeking damages from a plane engine-maker.

Mr Mallya’s lawyer presented details of the offer to the court, which then sought the response of the banks on Mallya’s offer within a week.