Goa: The auction of former liquor baron Vijay Mallya’s Kingfisher Villa in Goa has failed to attract any buyers. The auction was held for an hour on October 19 with a reserve price of Rs 85.29 crore. The failure to attract any bidders for Mallya’s prized property located at Candolim in Goa is yet another setback for the 17 bank consortium led by State Bank of India (SBI).
The consortium is owed Rs 6,963 crore by Mallya’s now defunct Kingfisher Airlines. With accumulated interest and other charges from 2014, the total amount owed by Kingfisher Airlines to banks is almost Rs 9,000 crore.
The Goa villa measures almost three acres and is roughly the size of three football fields. The villa has been in the news for hosting some Mallya’s most extravagant parties, including his birthday in December last year, which saw celebrity artistes like Enrique Iglesias performing at the bash.
The property, sandwiched between the picturesque Nerul river and the Arabian sea, was being eyed by leading hotel chains according to local reports. SBI said that atleast half a dozen buyers had turned for inspection of the property a few weeks before the auction. But despite that, nobody turned up on the actual auction day.
“The hospitality sector did not turn up for the auction because of the property’s limited redevelopment potential. This property would have been suitable for individuals looking to buy a residential property but then the high reserve price of Rs 85 crore would have acted as a deterrent” said Saurabh Mehrotra, National Director at Knight Frank.
The redevelopment potential of the Kingfisher Villa is restricted because it falls under the Coastal Regulation Zone (CRZ) which would mandate maintaining large open areas for plantations rather than build new structures. The fear of litigation also played a part in scaring off prospective bidders. The property has been fiercely contested by United Breweries (Holdings) Ltd, in whose name the property is registered, in Indian courts.
On August 4, 2016 banks had put up the Kingfisher House, measuring almost 1600 square meters, in Mumbai’s Ville Parle for auction at a reserve price of Rs 135 crore. This too had failed to attract buyers. The banks attempts to auction off Kingfisher’s trademarks at a reserve price of Rs 330 crore was also a failure. With the Kingfisher brand associated with negative perceptions, the trademarks were reduced to junk. Bank sources revealed that independent valuations had pegged the value of all the nine trademarks of Kingfisher at Rs 6 crore in 2015.
Banks had also tried to auction off the movable assets owned by Kingfisher Airlines lying at the Mumbai Airport. These included trolleys, tractors, ladders and even office stationary. Like the Goa and Mumbai properties, these also did not find buyers.
With the Goa property now going unsold, banks have exhausted all their options of recovering their money from the sale of assets personally pledged by Mallya to avail loans for Kingfisher Airlines.