Vijay Mallya may lose his hold on United Breweries (Holdings) Ltd (UBHL), the sole UB firm he holds a majority stake in, if banks win a case against him to wind up the company.
The company is facing eight winding up petitions from banks and financial institutions, filed in courts, for failing to honour corporate guarantees to the tune of Rs 7,256.24 crore provided to Kingfisher Airlines. Eight banks, including BNP Paribas and State Bank of India have filed winding up petitions on UBHL for defaulting guarantees given to the beleaguered airline.
UBHL had already declared Rs 8,158.89 crore as contingent liabilities for providing guarantees to airlines, which stopped operations in 2012
The company is contesting these cases in the Karnataka High Court, according to regulatory filings by the company in February.
The Supreme Court is expected to hear a winding up petition by BNP Paribas on April 6.
The UB Group chairman owns 52.3% stake in UBHL — both personally and through firms such as Watson and McDowell Holdings. The company’s market capitalisation on the BSE as on Friday was Rs 124.62 crore.
United Breweries reported a loss of Rs 1.99 crore on Rs 268.19 crore for the nine months to December. Bulk of UBHL’s revenue comes from selling Kingfisher beer in Southeast Asian and West Asian markets, where he has the rights to sell the product.
Mallya, who says there is a witch hunt against him, is using the courts to delay proceedings by the banks, who lent money to run Kingfisher Airlines. The Supreme Court has issued a notice to Mallya to respond by March 30 on cases filed by State Bank of India, while the Debt Recovery Tribunal has directed Diageo to freeze the $ 75 million due to Mallya for non-compete agreement. Diageo has already paid $ 40 million to Mallya and would release the balance money subject to conditions by the liquor baron.
Mallya and Kingfisher, now defunct since it suspended operations in October 2012, owes SBI and the consortium of 17 banks over Rs 7,800 crore of loans raised to run the airline.
Kingfisher Airlines was started as a trophy airline by Mallya for his son’s 18th birthday. The airline redefined luxury air travel in India but soon crash landed due to high cost structures, increased competition and mismanagement.
