‘Mallya shooing off Kingfisher Villa buyers’

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The consortium of lenders led by State Bank of India (SBI) is likely to cut the reserve price of the posh Kingfisher Villa in Goa by another 10% as it failed to get a single bidder in the third auction conducted in less than a year. Bankers allege that the liquor baron Vijay Mallya managed to ward off prospective buyers of the villa.

The luxury villa, where Mallya used to host his lavish parties, was taken over by the 17-member consortium after a protracted legal battle following defaults in servicing of debt. At present, banks are guarding the property.

A senior banker said, “A few hospitality groups had evinced interest but Mallya’s people are constantly keeping a watch on the property so that they can talk out prospective buyers from getting into a deal with the bankers. There is little we can do about such covert actions.”

On Wednesday, an e-auction was conducted by SBI Cap Trustee Co Ltd, an arm of SBI Caps, SBI’s merchant banking arm. Though the reserve price had come down to Rs 85.3 crore from the earlier Rs 150-crore tag, there were no takers in all the three auctions.

Another senior lender from the consortium said, “Now, we have to go back to the consortium of bankers to reach a consensus on a fresh reserve price. The new reserve price may be 10% lower than the present price of Rs 75 crore. It may take another three weeks to arrive at a fresh reserve price.”

Kingfisher Villa, owned by United Breweries Holdings (UBHL), was mortgaged as collateral for loans to provided the now-defunct Kingfisher Airlines. The villa was opened for inspection to interested bidders on September 26-27 and October 5-6.

The SBI-led consortium is also trying to sell Mallya’s Kingfisher House in Mumbai in a bid to recover part of the Rs 6,963 crore debt due from Kingfisher Airlines. Along with the interest on the principal, total debt has now ballooned to over Rs 9,000 crore. Mallya was toying with the idea of a one-time settlement of Rs 4,000 crore, but bankers said they have not got any concrete proposal from Mallya.

Mallya, who left the country on March 2 and is now in the UK, has been declared a proclaimed offender by a special Prevention of Money Laundering Act Court in Mumbai on a plea from the Enforcement Directorate which started investigating the case after Mallya left for London. However nothing has been proved so far, and Mallya has refused to appear in person at the Enforcement Directorate despite repeated summons.