HC refuses to stop sale of Vijay Mallya's UB shares
In a major blow to Vijay Mallya, Bombay HC today refused to grant interim relief to United Breweries Holdings, which had sought a stay on lenders selling shares pledged with them as security against loans to Kingfisher Airlines. HT reports.business Updated: Apr 03, 2013 01:58 IST
In a major blow to liquor baron Vijay Mallya, Bombay high court on Tuesday refused to grant interim relief to United Breweries Holdings, which had sought a stay on lenders selling shares pledged with them as security against loans to Kingfisher Airlines.
Lenders hold close to 2.6 million shares of UB group companies United Spirits (USL), Mangalore Chemicals and Fertilisers Ltd (MCF) and Kingfisher Airlines (KFA).
The UB Group lawyer said the banks have already sold one crore shares of MCF.
State Bank of India (SBI) on Tuesday sold 13,000 shares of USL. “We have sold a part of USL shares on Tuesday," said a senior SBI official.
UB Holdings had filed the suit seeking urgent relief to restrain banks from selling the over 26 lakh shares pledged with them under an agreement in 2010.
The UB Group did not respond to an email seeking comments for this report. A consortium of 14 banks has a combined exposure of Rs.7,000 crore to Kingfisher, which paid its staff salaries for June and July, 2012 on Tuesday.
Sources said the lenders are preparing to file a petition in a debt recovery tribunal against the airline.
SBI has the maximum exposure in KFA at Rs.1,600 crore, followed by Punjab National Bank (Rs.800 crore). Lenders outside the consortium include Srei Infrastructure finance Ltd (Rs.430 crore).
Apart from shares in USL and MCF, the lenders hold two UB Group properties in Mumbai and Goa and two helicopters, besides the Kingfisher Airline brand as collateral in addition to a personal guarantee from Mallya.