Banks reject Mallya's Rs 4000 crore repayment proposal

NEW DELHI: A consortium of 17 banks, led by State Bank of India, has rejected a proposal given by beleaguered liquor baron Vijay Mallya and his firms to pay back Rs 4,000 crore by September 30, saying that there is “no value in the offer“ and is likely to plead the Supreme Court on Wednesday to pass direction against him.Mallya and his firms on March 31had told the apex court that they were ready to pay Rs 2,000 crore upfront and over Rs 2,000 crore by September 30 and placed a proposal in a sealed envelop before a bench of Justices Kurian Joseph and R F Nariman. The bench had asked the SBI to go through the proposal and respond by April 7 whether it was acceptable or not.The proposal made by Mallya, UB Group, Kingfisher Airli nes and Kingfisher Finvest, however, have failed to satisfy the banks and SBI has rejected it.Sources aware of the development said that SBI formally informed Mallya three days ago about its decision. The sources said that the bank would plead the court for refund of the entire loan amount of Rs 9,000 crore within a reasonable time.In addition to the over Rs 4,000 crore promised by September 30, Mallya had said he was willing to assign gains from a $236 million lawsuit Kingfisher Airlines had filed in Bengaluru in 2013 against aircraft engine-maker International Aero Engines (IAE) for allegedly supplying “inherently defective“ engines for its fleet of A-320 aircraft that led to grounding of its 14 aircraft and consequential losses.SBI has the highest exposure of Rs 1,600 crore to Kingfisher Airlines. Other banks with exposure to the airline include PNB and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank (Rs 410 crore). UCO Bank has to recover Rs 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore (Rs 150 crore), IOB (Rs. 140 crore), Federal Bank (Rs. 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore). The consortium had told SC they had “advanced to KFAloans of thousands of crores of rupees. By way of a Master Debt Recast Agreement of December 21, 2010, and other related documents, the existing lands were restructured and treated as a single facility. United Breweries and Mallya have on December 21, 2010, executed both corporate guarantee and personal guarantee promising repayment of the entire amount due to the banks“.