Lenders to the grounded Kingfisher Airlines will auction one of promoter Vijay Mallya’s flagship properties, Kingfisher House, in Mumbai, on Thursday.

The e-auction will be conducted by SBI Cap Trustee Co Ltd, which is an arm of SBI Caps, the merchant banking arm of State Bank of India. SBI Cap Trustee Company had taken possession of the 2,401 sq m property in February 2015. The e-auction will be conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.

The reserve price for the property at Andheri has been fixed at Rs 150 crore.

The move follows the airline’s failure to pay banks their dues. As on January 31, 2014, KFA owes banks Rs 6,963 crore. All the banks had classified the loans as non-performing. Some banks, including SBI and United Bank of India, have declared Mr Mallya a wilful defaulter.

Banks recently moved the debt recovery tribunal to halt payment of $75 million by Diageo, which controls United Spirits Ltd, to Mr. Mallya. The payment was part of a deal under which the liquor baron would step down as the company’s chairman. Banks also pleaded with the court to not allow Mr Mallya to travel abroad. However, Mr Mallya managed to fly out. Diageo also confirmed that Mr Mallya was paid $40 million, the first instalment of the deal.

The country’s largest lender, State Bank of India, which leads the lenders’ consortium that has extended loans to the troubled airline, had recently said banks are fighting more than 20 cases in relation to Kingfisher Airlines in various courts, including the debt recovery tribunal. There have been more than 500 hearings so far with 180 adjournments.

(The Hindu)