Bidders remain elusive for Kingfisher House; auction may fail

The proposed auction of Kingfisher House, the erstwhile headquarters of Vijay Mallya-led group's long-grounded airline, may prove to be a damp squib yet again tomorrow as bidders have remained elusive even at a reduced reserve price of Rs 135 crore.

This is the second attempt by the banks to recover part of their unpaid loans from Kingfisher Airlines through auction of this prime office property near domestic airport here, after not even a single bidder turned up at an earlier auction in March at a reserve price of Rs 150 crore.
Sources said same fate awaits for the one-hour auction scheduled for tomorrow, as not even a single bidder deposited the earnest deposit money within the deadline of August 1.
Besides, the still high reserve price, the numerous legal issues facing the group may also be keeping the bidders away.

Kingfisher House is just one of the several properties, together worth over Rs 700 crore that lenders and the tax department will put under hammer this month to recover part of their outstanding dues totalling thousands of crores of rupees from the airline.

The auction of Kingfisher House, which has a built-up area of over 17,000 sq ft and is located in the plush Vile Parle area, is scheduled to begin at 1100 hrs tomorrow.

The 17-bank consortium, led by State Bank of India, revalued the property in May and reduced the reserve price by 10 per cent to Rs 135 crore, after they failed to attract a single bidder during the earlier auction in March.
The airline, owned by beleaguered Vijay Mallya, who left the country on March 2, using his diplomatic passport, owes over Rs 9,000 crore including penal interest to banks.

Mallya's luxurious personal jet along with everything inside that include cushy couches and even a bathrobe will be auctioned by the service tax department on August 18.

Besides Kingfisher House, lenders have also separately put up for sale some of the movable secured assets worth Rs 13.70 lakh lying at this office property.

The items on sale would include eight cars -- Toyota Innova, Honda City, Honda Civic and Toyota Corolla, among others. The reserve price of each car has been set differently in the range of Rs 90,000-2.50 lakh.

These assets will be auctioned separately on August 25.
On the same day, banks will also re-auction brands and trademarks of the airlines including the Kingfisher logo as also the once-famous tagline 'Fly the Good Times'.

The other trademarks on sale included Flying Models, Funliner, Fly Kingfisher and Flying Bird Device.

The reserve price for auction of brands and trademarks has also been reduced to Rs 330.03 crore from Rs 366.70 crore earlier.

In the heydays of Mallya-led group, the Kingfisher brand itself was valued at over Rs 4,000 crore by Grant Thornton when the airline was at its peak.

In its annual report for 2012-13, KFA said at its peak, it was the largest airline in the country with a five-star rating from Skytrax. The airline's brand had been registered separately from the Kingfisher beer trademarks.

Banks will also soon auction Kingfisher Villa situated at Condolim, in north Goa, which they took possession from the group in May this year after a long legal battle.
The date for the auction of Kingfisher Villa has not been announced so far, but it can also happen in August itself.

According to sources, valuation process by the banks is underway for the Villa, which has come out to be around Rs 90 crore.