Kingfisher House to be put up for auction once again

After the State Bank of India (SBI) found no takers at the first auction held in March at a base price of Rs 150 crore, the SBI-led SBI

Capital Trustee Company has decided to re-auction the 17,000 square-foot Kingfisher House located in Vile Parle at a base price of Rs 135 crore.

“We have sent a proposal to the service tax department, which is expected to give us a written approval for auctioning Kingfisher House at a base price of Rs 135 crore. Once we have the service tax department’s approval in hand, we will advertise about the auction in the newspapers,” said sources from the SBI.

Kingfisher House, owned by Kingfisher Airlines, was taken into custody by the SBI in February 2015, for non-payment of Rs 6,963 crore, of which, fugitive liquor baron Vijay Mallya is a guarantor.

In February, the SBI announced that it would auction Kingfisher House under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002, at a base auction price of Rs 150 crore. Kingfisher House also came with an outstanding property tax of Rs 67 lakh. However, after the no-show in the auction, the SBI consulted real estate experts who said that the quotation of Rs 150 crore was an overvalued estimation.

Of the new base auction price, Vikram Mehta, President, Confederation of Real Estate Brokers’ Association of India (CREBAI), said, “Still, the base price quotation of '135 crore is overvalued and if we go by current market conditions, the value of Kingfisher House is not more than Rs 80 crore.”

He said that another reason for the auction not being successful was height restrictions near airports, where construction of more than four storeys was not permitted. Mr Mehta said height restrictions were imposed because firstly, the area was marked considering the funnel of the runway and periphery of the airport for takeoff and landing of aircraft and secondly, radar signals were not distributed.

Meanwhile, Mallya is said to be in the United Kingdom after he left India on March 2. Last week, the SBI rejected a proposal put forth by Mallya and his companies to pay Rs 4,000 crore by September towards settlement of his loan before the Supreme Court.

The Directorate General of Civil Aviation, following a strike by the airline’s employees, had suspended Kingfisher Airlines’ operating licence in October 2012.