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Mumbai: With no bidders, SBI brings down price of Vijay Mallya's Kingfisher House

March e-auction of the Vile Parle building turned out to be a damp squib. Reserve price reduced to R135 crore. Next auction in August

Beleaguered businessman Vijay Mallya’s Kingfisher House — the former headquarters of his defunct Kingfisher Airlines Ltd — is once again set to be auctioned, after the last one in March turned out to be a damp squib.

Vijay Mallya’s Kingfisher House in Vile Parle was first put up for e-auction on March 17 this year
Vijay Mallya’s Kingfisher House in Vile Parle was first put up for e-auction on March 17 this year

State Bank of India’s (SBI) investment bank arm SBICAP Trustee Company announced that the auction of the building would be held on August 4. The fresh auction was announced after SBICAP conceded to demands to lower the reserve price of the building from Rs 150 crore to Rs 135 crore.

Kingfisher House, which boasts a built-up area of 17,000 square feet, was earlier put up for e-auction on March 17. Nobody came forward to buy it. At the time, builders had claimed that the price was too high and the market, sluggish. In order to make it saleable, SBICAP dropped the reserve price by Rs 15 crore.

However, one of the builders from South Mumbai said even the current price of Rs 135 crore was too high. “If the bank wants to sell the building, it needs to price it below Rs 100 crore,” the builder said.

Another builder said that buying Kingfisher House, which is situated in Vile Parle, wouldn’t be a lucrative option, because the building is very close to the airport, and would come with many height restrictions. “Every time they sell the building, they do not mention the FSI available. Builders will only buy the property if there is development potential,” the builder claimed. The earnest money deposit, which every bidder will have to make by August 1 to participate in the bid, is Rs 13.50 crore. The property will be open for inspection on July 8, 15, 22 and 29.

Mallya, who owes Rs 6,963 crore to a consortium of banks led by SBI, had pledged this building so that the banks could recover their money.

All the banks have classified the loan accounts as non-performing accounts. The airlines owes SBI the highest amount of Rs 1,600 crore. The other banks that he owes money include, Punjab National Bank and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank of India (Rs 410 crore), UCO Bank (Rs 320 crore), Corporation Bank (Rs 310 crores), State Bank of Mysore, Indian Overseas Bank, Federal Bank, Punjab & Sind Bank and Axis Bank.

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