Banks to reject Vijay Mallya's Rs 4,000 crore loan repayment offer?

Last week, Kingfisher Airlines and Vijay Mallya had submitted a proposal in the apex court to pay Rs 4,000 crore by September to the consortium of 17 banks led by State Bank of India.

Mumbai: Lenders to the long-defunct Kingfisher Airlines are likely to press for a better offer on payment of dues from its promoter Vijay Mallya, sources said.

Last week, the airline and Mallya had submitted a proposal in the apex court to pay Rs 4,000 crore by September to the consortium of 17 banks led by State Bank of India.

A Bench comprising Justices Kurian Joseph and Rohinton F Nariman had given the consortium a week's time to respond to the proposal and fixed April 7 for further hearing.

Sources at various banks said that they want a better offer from the company.

In a statement issued last week, SBI had said, "the consortium of banks led by SBI confirms receipt of an offer for settlement of dues from Kingfisher Airlines Ltd. The bank along with other consortium members, will examine the same."

The repayment offer in the Supreme Court was submitted by Mallya, Kingfisher Airlines, United Breweries Holdings and Kingfisher Finvest India.

Mallya and Kingfisher Airlines owe Rs 9,000 crore to the consortium whose leader SBI had an exposure of over Rs 1,600 crore to the now defunct airline.

Of the total amount, the banks have so far recovered only around Rs 1,240 crore by selling pledged shares and other collaterals. The lenders have another Rs 1,250 crore to gain but the amount is blocked due to various court stays.

Last year, SBI declared Mallya as "wilful defaulter" for failing to repay the dues. Punjab National Bank also declared him, group holding company United Breweries Holdings and Kingfisher Airlines wilful defaulters last month.

The banks have put on block the brand Kingfisher for sale on April 30 with a base price of Rs 356 crore. When pledged as collateral, the brand Kingfisher was valued by Grant Thornton at Rs 4,100 crore in 2011 and the recently others have pegged it a paltry Rs 100-200 crore.

The banks' efforts at selling the Kingfisher House in the city on March 17 came a cropper as no bidder came forward to buy the property, which had a reserve price of Rs 150 crore.