Mumbai: What appeared to be a case of Rs 7,000 crore of public money gone down the drain with the collapse of Kingfisher Airlines, now appears recoverable after the Karnataka High Court declared guarantor United Breweries Holdings' share sale to Diageo Plc void.
The case of more than a dozen lenders, led by the State Bank of India and Punjab National Bank, got a boost when the Karnataka High Court last week annulled UB Holdings' sale of 6.9% stake in United Spirits to Diageo, saying bankers have a claim over guarantor's assets.
United Breweries Holdings, a Vijay Mallya Group's holding company with stakes in United Spirits, United Breweries (the makers of Kingfisher beer and Mangalore Chemicals), has guaranteed about Rs 6,000 crore of nearly Rs 7,000 crore loans of Kingfisher Airlines, said bankers.
Although there is very little in terms of assets recoverable from Kingfisher Airlines, the guarantee of UB Holdings could be used to enforce lenders' claim, say lawyers and bankers. The value of shares held by UB Holdings in listed companies is valued at more than Rs 5,200 crore, according to Bloomberg data. If the 6.9% of United Spirits is added, then banks could theoretically recover as much as Rs 7,800 crore.
Read news in full 24/12/13 Sangita Mehta & Maulik Vyas/Economic Times
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