More KFA lenders invoke shares pledged by Mallya

Mallya and his affiliates have 32.12% in Kingfisher Airlines but 21.60% of that stake is pledged

SBICAP Trustee Company has invoked a pledge of 115.5 million shares of Kingfisher Airlines. These had been  pledged with the financier by airline chairman Vijay Mallya and his various group companies. The shares, amounting to a 14.29 per cent stake in the defunct airline that remains grounded since October 2012, have a market value of about Rs 45 crore.

As promoters of the company, Mallya and his affiliates have a 32.12 per cent stake in Kingfisher Airlines but 21.60 per cent of that is pledged. UB Holdings, the principal holding company of the Mallya-led UB Group, has a 21.36 per cent stake as the largest promoter but has pledged 99 per cent of that stake — presumably from which 14.29 per cent was pledged with SBICAP. UB Holdings has made large borrowings and also provided corporate guarantees for loans to Kingfisher, under debt of Rs 7,400 crore.

Lenders, including State Bank of India (SBI), have begun finding ways to monetise the collateral to recover their dues, by selling pledged shares held in various UB Group companies.

Last week, one of the creditors, HDFC Ltd, had invoked a similar pledge on 0.06 per cent or 90,000 shares of United Spirits Ltd, valued at about Rs 25 crore. Shares of United Spirits closed at Rs 2,716 apiece on Tuesday on the BSE. Earlier this month, the Jammu and Kashmir (J&K) Bank had also invoked a pledge of 10.72 per cent or 1.5 million shares in McDowell Holdings, one of the companies owned by Mallya. UB Holdings is now left with a stake of 3.5 per cent in McDowell Holdings. Mallya owes Rs 80 crore to J&K Bank, while the market value of the share pledge invoked amounts to about Rs 5 crore.

Apart from UB group companies, assets of the firms and Mallya’s personal holdings were also pledged. Mallya’s villa in Goa, Kingfisher’s office at Mumbai’s Andheri area, a luxury yacht, buses used by Kingfisher Airlines at airports and other equipment of the airline are among the collateral. Creditors have also begun sealing Mallya’s properties in Goa and Mumbai.

SBI has the largest exposure to Kingfisher at Rs 1,600 crore, followed by Punjab National Bank and IDBI Bank at Rs  800 crore each. Bank of India and Bank of Baroda have an exposure of Rs 650 crore and Rs 550 crore, respectively.