Lenders To Kingfisher Air To Auction Some Assets

Lenders who are owed more than USD$1 billion by grounded Indian carrier Kingfisher Airlines are putting up for sale some of its assets including cars and forklifts.

An auction notice appeared on Saturday on the website of the trustee company representing the creditors.

Kingfisher, founded by drinks baron Vijay Mallya and once India's second-biggest airline, stopped flying three years ago as it ran out of cash. It owes money to its lenders, mostly state-run banks, and suppliers.

As of end-January 2014, the airline owed INR69.63 billion rupees (USD$1.1 billion) to its banks, who are assessing interest of 15.5 percent a year on the debt.

On December 7, the banks will sell moveable pledged assets through an Internet auction.

The reserve price for the assets going on sale is set at INR6.5 million rupees, meaning that at most the auction will let the lenders recover just a fraction of what they are owed. The banks earlier this year took over USD$15 million worth of airline property after a two-year legal battle.