Kingfisher auction fails to attract bidders


 

Vijay Mallaya

The online auction of the Kingfisher logo and brands turned out to be a damp squib with banks failing to attract even a single buyer.

This was the second failed attempt by the 17-bank consortium led by state-run behemoth SBI to recover some money from Vijay Mallya, the billionaire business tycoon, who is now a fugitive of the Indian law living in London. The banks had earlier tried to auction of Kingfisher House — the erstwhile headquarters of the long-defunct airline — but had met with a similar fate, with no bidder coming forward.

The consortium of banks led by the State Bank of India had today initiated an auction of various brands and trademarks of the long-grounded Kingfisher Airlines, including its once-famous tagline ‘Fly The Goodtimes’, but bidders were hard to come by.

The auction began at 11:30 am. The reserve price for the trademark has been kept at Rs. 366.70 crore, less than one-tenth of the price at which it was pledged with as collateral for the loan.

Mallya had pledged the trademarks as collateral with banks at the time of taking loans from them.

“The mainline brand Kingfisher belongs to someone else. The price of the brand holds no value now. It can only be a collector’s item for maybe Rs 2 crore or so,” said a brand strategy expert.

“Also, it can be used for only an airline business. So only an entity wanting to enter the airline space would buy it and no big company would go by the Kingfisher brand but its own. Banks are holding an empty piece of paper.”
Besides the logo and tagline, other trademarks auctioned include Flying Models, Funliner, Fly Kingfisher and Flying Bird Device.

“There were no bids, possibly because the reserve price was considered very high. Though the reserve price was set much lower than its original valuation at the time of taking the brand as collateral, people still found it to be high,” a banking source said. The online auction began at 11.30 am and lasted for an hour without any success. It was conducted by SBICAP Trustee Company on behalf of lenders under the Sarfaesi Act.

The Kingfisher brand itself was valued at over Rs 4,000 crore by Grant Thornton when the airline was at its peak.

In its annual report for 2012-13, KFA said that at its peak, it was the largest airline in India, with a five-star rating from Skytrax. The airline’s brand had been registered separately from the Kingfisher beer trademarks.   A senior banker said, “The interest for this auction could have been from existing airline operators, but no one will come. It is better to start a new airline company than to buy this brand and revive it.”

In a previous attempt at recovery of dues, which have ballooned to over Rs 9,000 crore after taking into account the interest component, the banks had conducted an auction of Kingfisher House last month, but did not find any takers at a reserve price of Rs 150 crore. Sources said the lenders might now try to lower the reserve price in both the cases in their future efforts to sell these pledged assets.

The Kingfisher House property has a built-up area of over 17,000 square feet in posh Vile Parle near domestic airport here.

Mallya, who left India on 2 March and is currently in London, has a non-bailable warrant against him in a money-laundering investigation. His passport has also been revoked. Earlier this week, the government said it has written to the British government seeking Mallya’s deportation.

In an interview to Financial Times, the liquor baron, however, said he is in a “forced exile” and has no plans at the moment to return to India where things are flying at him “fast and furious”.

“I definitely would like to return to India. Right now, things are flying at me fast and furious. My passport has been revoked. I don’t know what the government is going to do next,” he said.

Mallya said he wanted a “reasonable” settlement with creditor banks for his defunct airline, but they “are not getting any money” by taking his passport or arresting him.

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