No takers for the
King of Good Times!!
Attempts by a consortium of banks to recover Rs. 9,000 crore
invested in Vijay Mallya’s Kingfisher Airlines failed to attract buyers as the
auction held on April 20, 2016, ended without attracting any bidders at the
reserve price. The auction apparently failed because of the high base price.
Kingfisher stopped flying in October 2012 for want of cash,
leaving creditors, suppliers and employees unpaid and owed banks Rs 9,091
crore ($1.4 billion Approx.). But,
now comes the latest twist on an ongoing problem of Vijay Mallya’s Debt
recovery and Financial Dispute when the banks realised that they couldn’t
recover much from the assets pledged by Mallya. Interestingly, Indian Banks
decided to take possession of nine trademarks to recover debt from Mallya and
other defaulters.
SBICAP
Trustee Company Limited (SBICTCL) a subsidiary of SBI Capital Markets Limited
and a Debenture Trustee registered with Securities Exchange Board of India
(SEBI) recently on March 10, 2016 disclosed in a notice that the trademarks and
brands seized were covered by an assignment deed
dated March 18, 2011 that Kingfisher Airlines Ltd - with United Breweries
(Holdings) Ltd and Vijay Mallya acting as guarantors - had signed with the
banks.
The following are the list of trademarks of Kingfisher
Airlines that was auctioned on April 30 -
|
Sl. No
|
Application No
|
Class
|
Brands/Trademarks
|
Status
|
|
1.
|
1300950
|
16, 25, 39
|
Flying Models (word mark)
|
Registered & valid up to 06.08.2024
|
|
2.
|
1300951
|
16, 39
|
Fly the Good Times (word mark)
|
Registered & valid up to 06.08.2024
|
|
3.
|
1300952
|
16, 39
|
Funliner
|
Registered & valid up to 06.08.2024
|
|
4.
|
1318243
|
39, 42
|
Kingfisher (Label Mark)
|
Registered & valid up to 01.11.2024
|
|
5.
|
1319150
|
39
|
Flying Bird Device
|
Registered & valid up to 05.11.2024
|
|
6.
|
1519887
|
39
|
Fly Kingfisher (Label)
|
Registered & valid up to 10.01.2017
|
|
7.
|
1519888
|
39
|
Fly Kingfisher (world)
|
Registered & valid up to 10.01.2017
|
|
8.
|
1519889
|
39
|
Fly Kingfisher (world)
|
Registered & valid up to 10.01.2017
|
|
9.
|
1519890
|
39
|
Fly Kingfisher (Label)
|
Registered & valid up to 10.01.2017
|
In the year 2012, a global
consultancy firm Grant & Thronton valued Kingfisher trademarks at Rs 4,111
crore or roughly $1 billion, when the airline's license was suspended by
India's aviation regulator Director General of Civil Aviation (DGCA). The base
price for the trademarks had been set at Rs 366.70 Crore. This subsequently
concludes that the individuals/groups who would be interested in the auction
must be having or be ready to start/incorporate their own airlines related
business. The most relevant question to be raised here is “Who would be ready to invest on trademarks of defunct company?”
However, there are precedents existing where Eastern
Airlines, a now defunct airline major, went bankrupt and then its intellectual
property was picked up by another airline company called New Easter Airlines in
USA and commenced operation in mid-2015.
In
fact Indian Banks passing loans against intellectual property for reputed and
well-known brands is not a new form of practice. IP financing, or the use of IP assets (trademarks, design rights,
patents and copyright) to gain access to credit, is gaining increasing
attention in IP circles. Multinational corporations as well as small and medium
sized enterprise, are leveraging their IP assets in exchange for finance, and
lending institutions around the world are increasingly extending their business
to provide loans on the basis of IP. Higher asset values may also help in negotiations
with a company’s bank and facilitate access to credit, or help to negotiate cheaper interest rates on
credits. Intellectual
property though intangible but are always secured assets.
As far as Kingfisher is concerned, the
brand has always been with glamour, vibrancy and lifestyle to the skies. The brand image of the parent Kingfisher brand gave further
credibility to its marketing campaigns, featuring India's then top models, but
it seems that times have really hit hard ‘the King of good times’, as it is no
longer seen as a positive association.
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