 "Vijay Mallya's UB Holdings faces winding up petitions by banks")
Vijay Mallya might lose hold of United Breweries Holdings Limited, or UBHL, the sole UB company in which he has a majority stake, if banks win a case against him to wind up the company.
UBHL is facing as many as eight winding-up petitions from eight banks and financial institutions — including BNP Paribas and State Bank of India (SBI) — in various courts for failing to honour corporate guarantees of Rs 7,256 crore provided to the now-grounded Kingfisher Airlines.
UBHL is contesting the winding-up petitions filed by the banks in the Karnataka High Court, according to regulatory filings by the company in February.
UBHL is facing as many as eight winding-up petitions from eight banks and financial institutions — including BNP Paribas and State Bank of India (SBI) — in various courts for failing to honour corporate guarantees of Rs 7,256 crore provided to the now-grounded Kingfisher Airlines.
UBHL is contesting the winding-up petitions filed by the banks in the Karnataka High Court, according to regulatory filings by the company in February.
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Meanwhile, the Supreme Court is expected to hear a winding-up petition, which was filed by BNP Paribas, on April 6.
UBHL has already declared Rs 8,159 crore as contingent liabilities for providing guarantees to the airline, which stopped operations in 2012.
Mallya owns 52.3 per cent 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 125 crore.
UBHL reported a loss of Rs 1.99 crore on Rs 268 crore during the April-December 2015 period. The bulk of UBHL's revenue comes from selling Kingfisher beer in Southeast Asian and West Asian markets, where Mallya has the rights to sell the product.
The Supreme Court has issued a notice to Mallya to respond by March 30 on cases filed by SBI, while the Debt Recovery Tribunal has directed Diageo to freeze the $75 million, which it was to pay Mallya as part of a deal. under which Mallya resigned as chairman and director of Diageo’s Indian subsidiary United Spirits and agreed not to compete with the British liquor major in spirits business in the next five years.
However, Diageo had already paid $40 million to Mallya before the Tribunal’s order came.
Mallya and Kingfisher owe SBI and the consortium of 17 banks around 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.