Kingfisher Airlines has been flying low in the news recently. It is a known fact that its founder Mr. Vijay Mallya has been labelled as a defaulter for being unable to repay loans taken from several Indian banks and being charged with money laundering. The entity, Kingfisher Airlines, owes close to INR 9000 crores, including interest to these banks. The company has not been able to payback its dues as it has become a defunct company. The banks, after an unsuccessful attempt to recover the loan by selling off Mr. Mallya’s Mumbai property, have now decided to auction the Kingfisher Airlines Trade Marks.
Nine of Kingfisher Airlines Trade Marks which will be auctioned, include the ‘Kingfisher’ bird logo, tag lines ‘Fly the Good Times’, ‘Funliner’, and ‘Fly Kingfisher’. Of the nine Trade Marks to be auctioned, four are registered and valid up to January 10, 2017.The Trade Marks will be auctioned online on April 30, as stated by the SBICap Trustee Company. The base price set for the same is 366.70 crores. Some of the Trade Marks which will be auctioned were transferred from the UB Group’s to the Kingfisher Airlines. The Trade Marks are for sale as Kingfisher Airlines had pledged these Trade Marks as collateral with the banks while taking loans. Although in its heyday the brand was valued at Rs 4,100 crore by Grant Thornton, it has suffered a terrible blow due to the airlines being grounded for more than three years now.
An entity’s assets may be broadly divided into two categories: physical assets and intangible assets like intellectual property. Traditionally, physical assets were responsible for the bulk of the value of a company. In recent years however, the situation has changed significantly. Nowadays, intangible assets are becoming increasingly more valuable than a company’s physical assets. It doesn’t require an expert to say that the valuation of a Trade Mark/ brand is directly proportional with the revenue generated by the business that is associated with the same Trade Mark/ brand.
Brand consultant Harish Bijoor, owner of Harish Bijoor Consults Inc, talking about the Kingfisher Brand stated that “There can be no sole ownership of the Kingfisher brand. So essentially, the Kingfisher Airlines brand that the banks hold is a dud. Banks will never be able to sell the trademarks”. He also said that banks would not be able to monetize the Kingfisher brand till they get an injunction from a Court restricting United Breweries from using the Kingfisher trademark. In the past, United Breweries has clarified that it holds complete ownership in the Kingfisher brand, which has been registered by the company under trademark classes pertaining to alcoholic beverages and that the trademarks have neither been hypothecated nor pledged to any lender to secure loans.
Will somebody who buys the Kingfisher Trade Marks in an auction be able to use it to generate any monetary benefit out of it? Time will tell whether Kingfisher Airlines’s Trade Marks will bring any luck to bankers or Mr. Mallya or for that matter to anybody at all!
Authored by Sambhabi Patnaik