 "Lenders' consortium to auction Kingfisher Airlines' assets")
Kingfisher Airlines’ assets are located at Chhatrapati Shivaji International Airport, Mumbai, and include forklifts, tractors and vehicles. The auction is slated for December 7 with reserve price of Rs 65 lakh, according to a notice by the SBICap Trustee Company Ltd (SBICTCL). SBICTL is acting as the security trustee for credit facilities sanctioned by lenders.
United Breweries (Holdings) Ltd and Vijay Mallya, against whom many lenders have begun process to declare him as wilful defaulter, are guarantors. KAL account is already a non-performing asset (NPA) in the books of banks. They have already made provisions for the NPA according to regulatory norms and have taken possession of “Kingfisher House”, airline’s headquarters near airport.
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An IDBI Bank executive said though recovery is happening for banks through SBI as leader of consortium, each lender has to separately carry out the process for declaring borrower as wilful defaulter. IDBI Bank is one of the lenders to the airline and has commenced legal process for the recovery.
According to Reserve Bank of India’s rules, a ‘wilful default’ would be deemed to have occurred if the borrower has defaulted in meeting payment/repayment obligations to the lender even when it has the capacity to repay.
The identification of the wilful default should be done factoring the track record of the borrowers and should not be decided on the basis of isolated transactions/incidents. The default, to be categorised as wilful, must be intentional, deliberate and calculated.