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Business News/ Companies / People/  Vijay Mallya’s corporate jet to be auctioned in May

Vijay Mallya’s corporate jet to be auctioned in May

Service tax department advertisement calls for online global bids to buy the modified Airbus A319, which has a list price of around $88 million

A file photo of Airbus A319. Photo: ReutersPremium
A file photo of Airbus A319. Photo: Reuters

Delhi/Mumbai: The Office of the Commissioner of Service Tax on Wednesday released an advertisement for the sale of former UB Group chairman Vijay Mallya’s corporate jet, whose registration number famously bore his initials, VT-VJM.

The sale, the advertisement said, would be done by state-run MSTC Ltd, which is also the official selling agent of the service tax department.

The advertisement was published in the Times of India across all its editions.

The auction process by the service tax department to recover over 370 crore in dues and penalty. Late last year, the Bombay high court had observed that there is no legal trouble for auctioning the aircraft which is on financial lease to Kingfisher Airlines.

The advertisement by service tax department on Wednesday said, “M/s MSTC Ltd (A Govt. of India Enterprise), the Selling Agent of the Service Tax Department, hereby invites online Global Bids for purchase of luxurious aircraft A319-133CJ VT-VJM MSN 2650 of M/s Kingfisher Airlines Ltd. attached by the Service Tax Department on “As Is Where Is, As Is What Is, Whatever There Is and No Complaint" basis through e-Auction no. MSTC/WRO/SERVICE TAX-V COMMISSIONERATE, MUMBAI/1/Bandra (East)/16-17/3 from 12th May 2016 to 13th May 2016. Inspection Dates: From 2nd April 2016 to 10th May 2016."

As per Directorate-General of Civil Aviation (DGCA) records, the Airbus A319-133ACJ (Airbus Corporate Jet) aircraft was registered on 29 November 2006. The owner of the aircraft, it said, was CJ Leasing (Cayman) Ltd, located in Walker House, 87 Mary Street, George Town, KY1-9002, Grand Cayman. The aircraft was operated by the Bengaluru-based Kingfisher Airlines.

The advertisement describes the VT-VJM aircraft as “a corporate jet having 25 passenger seating capacity and 6 crew seating capacity exclusively designed for exotic and luxurious use." The aircraft, it added, “has attractive exterior and interior layout and design."

The aircraft, which has been grounded for more than 18 months, is currently parked at the Chhatrapati Shivaji International Airport in Mumbai.

A person familiar with the development said an Airbus A319 aircraft with a standard specification has a current list price of around $88 million and but it is unlikely to fetch high prices.

“The grounded private jet has excellent interiors in good condition. However, it is unlikely to fetch anything beyond $50 million even if there are desperate buyers in the auctioning process," this person said.

The second person said the aircraft interiors are built according to Mallya’s taste, sporting paintings and pictures of Lord Balaji.

“But the aircraft is not flying for more two years. And the price depends largely on technical aspects and grounded aircraft will always have a discount to the current second sale value," he said.

He also pointed out that there were no bidders for Kingfisher house, the headquarters of Kingfisher Airlines, as State Bank of India had fixed an unrealistic reserve price of 150 crore.

“The buyer, if he is realistic, will consider the age of the aircraft, period of grounding, technical issues, legal troubles and other issues regarding airworthiness," he added.

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Updated: 24 Mar 2016, 02:54 AM IST
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