Mallya rejigs his holdings in Kingfisher Airlines

Moves away 40 million shares to UB International Trading which may not be covered under the lenders agreement

In a move which may further irk the stressed out lenders consortium of Vijay Mallya-led Kingfisher Airlines, Mallya has moved 40 million shares held by one of his companies - Kingfisher Finvest India to UB International Trading Limited.  This transaction between Vijay Mallya-owned companies was effected through an off-market transaction. It is understood that UB International Trading Limited may not be covered under the lender's agreement and hence lenders may not be able to enforce liabilities on this entity immediately.

Mallya through a clutch of his promoter-owned companies hold 32.12 per cent in Kingfisher Airlines which has been grounded for more than a year now. The lenders consortium led by State Bank of India has been waging a protracted battle against Kingfisher Airlines and its parent UB Holdings to recover as much as close to Rs 7,000 crore over the past year, with little success. After recalling the entire loan forked out to Kingfisher Airlines, the consortium has so far managed to get back around Rs 1,000 crore by selling various assets pledged to them as a guarantee by UB Holdings and Kingfisher Airlines.

UB International Trading is the international business division of UB Group and exports beverage alcohol, processed foods, leather footwear, apparel and has a network to export to over 75 countries. UB Group did not respond to a query on the intention of moving the 40 million shares to UB International Trading.

In response to the slew of legal battles which the lenders consortium have mounted, UB Group has been trying to wriggle out of these by levelling cases against the lenders that the method under which they (the lenders) are proceeding against UB Group is with prejudice and hence UB Group is entitled to damages. UB Group has also stated that the guarantees furnished by UB Holdings also be treated as null and void.