UB Holdings, the primary holding company of liquor baron Vijay Mallya, has reported a net profit of Rs 1,024 crore for the second quarter of FY14 as compared to a net loss of Rs 17 crore during the corresponding quarter. The primary reason for this huge jump in net profit is to the inflow of Rs 1,418 crore from Diageo, when it picked up a strategic 25.02 per cent stake in UB Group company - United Spirits.
The revenues of UBHL were down by 7 per cent at Rs 118 crore even as the company is in the midst of a slew of legal battles with creditors to its group company - Kingfisher Airlines.
UBHL which has invested close to Rs 2,000 crore as equity and forked out close to Rs 6,600 crore as guarantees, has been facing a host of legal cases from lenders who are trying to get back as much as Rs 6,000 crore which they had lent to Kingfisher Airlines.
While the lenders consortium is looking at all avenues, including sale of pledged assets to get back as much as they can, UB Group has in turn filed cases against the lenders claiming that they (lenders) are acting with prejudice and hence corporate guarantees should be treated as void.
