 "Vijay Mallya")
YES Bank has invoked 3.02 per cent of United Breweries’ stake pledged by Vijay Mallya and valued at Rs 770 crore for loans defaulted by the defunct Kingfisher Airlines.
This follows a week after State Bank of India declared Mallya a wilful defaulter after years of negotiations with the UB Group chairman to pay Rs 8,700 crore owed to a consortium of 17 banks did not yield results.
On Saturday, United Breweries said in a notification to the BSE the shares invoked by YES Bank were pledged by McDowell Holdings, a unit of UB Holdings, majority owned by Mallya. The United Breweries stock closed at Rs 974.80 on the BSE on Friday.
With SBI, the lead banker in the consortium, acting tough, Mallya is under pressure to salvage his pride after having lost the bulk of his business empire to Diageo and Heineken, which now control United Spirits and United Breweries, respectively. The multinationals have aggressive plans for India as they tap into a young population and a growing economy.
Mallya on November 24 said his priority was to settle the loans. “I am focusing on settling the Kingfisher affair with the banks,” Mallya told reporters at the sidelines of the annual general meeting of United Spirits. “It cannot be open to 10 different interpretations. I have said what I have said,” he added.
Mallya, his son Siddharth and mother Lalitha own 32.46 per cent in United Breweries through various companies. Nearly half of this, 15.57 per cent, was pledged by Mallya to banks and financial institutions as he tried to salvage Kingfisher Airlines.
YES Bank unilaterally invoked the 3.02 per cent stake to secure loans issued to UB group companies, United Breweries said in the notice on November 28. The YES Bank spokesperson was unavailable to comment.
United Breweries, the beverage company that makes Kingfisher beer which Mallya built into the country’s largest beer brand, is now 42.22 per cent owned by Dutch beverage maker Heineken. Heineken is promoting its premium products in India as it looks at earning higher margins at the cost of local brands built by United Breweries during Mallya’s tenure.
Mallya’s other company United Spirits is controlled by Diageo, the British liquor maker with whom he is waging a boardroom battle. The board of United Spirits has recommended to Diageo that Mallya be evicted from the board after it found he diverted funds from the company to salvage Kingfisher Airlines.
Mallya started Kingfisher Airlines to redefine air travel in India on the 18th birthday of his son. Mismanagement, cost overruns, increased competition and expensive jet fuel grounded the airline and literally cost Mallya his business empire.
The USL auditor has found that liabilities could raise as much as Rs 7,730 crore because of disputed liabilities of the company.
