United Bank of India has become the first of 17 lenders to admit that it no longer expects to recover its dues from liquor baron Vijay Mallya’s Kingfisher Airlines.
Interestingly, the Kolkata-based lender was the first bank to attempt to tag Vijay Mallya, chairperson, Kingfisher Airlines, as a wilful defaulter. Mallya and UB Group, however, have challenged the tag in court.
The lenders have been able to recover Rs 1,000 crore from Kingfisher Airlines out of more than Rs 7,500 crore since they recalled the loan in February 2013.
“The company may get some more crores by selling the Kingfisher House in Mumbai. Nothing happening on our account,” UBI managing director and CEO P Srinivas said.
“We may recover what is equivalent to the interest component. In the past two years, we lost interest payment, and we may be able to recover that much, and the principal amount, we may not,” he added.
The bank had extended Rs 400 crore in a consortium lending when Kingfisher Airlines was still flying. The airline was grounded in October 2012.
The airline, owned by Vijay Mallya, owes Rs 6,500 crore now (after around Rs 1,000 crore recovery) to a 17-lender consortium led by State Bank of India which has lent Rs 1,600 crore to the grounded airline.