If liquor baron Vijay Mallya's Kingfisher Airlines
fails, lenders owed USD 1.4 billion may end up with a small stake in his spirits business, a modest office building, the carrier's brand, and not a lot else.
A USD 16 million beachfront villa in Goa, where Mallya throws parties and shoots his Kingfisher swimsuit calendar, is owned by his UB Holdings Ltd (UBHL)
and pledged as collateral to State Bank of India, Kingfisher's lead bank. But Mallya's UB Group wants to swap the villa for another asset and says it has the right to do so. SBI is resisting.
Through interviews with bankers, lawyers, and others in the financial industry, as well as information provided by the company and publicly available data, Reuters has pieced together what parts of Mallya's empire are at risk if Kingfisher falls.
While Kingfisher has never made a profit, it grew quickly to become India's No.2 airline by domestic market share. It has since been knocked back to sixth, crippled by high debt and fierce competition.
Banks have guarantees of more than USD 1.2 billion from Mallya and his holding company, but collecting on them could prove difficult, and most of Mallya's lenders, mainly state banks, would pursue that only as a last resort, people familiar with the matter said.
No shares or other assets were directly pledged to banks against specific loans, according to Kingfisher.