A group of banks, led by the country’s largest lender, State Bank of India (SBI), is planning to sell stakes fugitive billionaire Vijay Mallya in three firms on June 23 in an attempt to recoup up to Rs 6,200 crore lent to his bankrupt Kingfisher Airlines.
According to documents seen by Moneycontrol, the shares would be sold in bulk in three companies: United Breweries Limited, United Spirits Limited, and McDowell Holding Limited.
On October 20, 2012, Mallya’s airline, Kingfisher, was grounded due to a financial crisis. In January 2019, Mallya was labelled a fugitive economic offender for loan defaults and for scamming banks.
If the share sale goes through, it will be the first time banks have made a major recovery in the Kingfisher-Vijay Mallya case since the debt became a non-performing asset, or bad asset, in late 2012. Mallya fled India on March 2, 2016, for the United Kingdom after defrauding 17 banks, and he has not returned since. He owes banks Rs 9,000 crore in addition to interest.
According to the documents reviewed by Moneycontrol, the sale of shares will take place under the supervision of the Bengaluru Debt Recovery Tribunal (DRT), which has authorised the recovery officer to sell shares in order to recover Rs 6,203 crore, plus costs and interest at 11.5 percent calculated from June 25, 2013, to the date of recovery.
In addition to SBI, Kingfisher Airlines’ lenders include Punjab National Bank, IDBI Bank, Bank of Baroda, Allahabad Bank, Federal Bank, and Axis Bank. These lenders made loans to Mallya over a few years in exchange for intangibles such as business brand and goodwill, as well as Mallya’s personal guarantee.
The recovery officer would sell about 22 lakh shares of McDowell Holding Limited, 4.13 crore shares of UBL, and 25.02 lakh shares of USL in a block deal on June 23rd, according to the share sale plan. McDowell Holdings will receive Rs 13.8 crore at today’s market price, UBL stake would fetch Rs 5,565 crore, and United Spirits shares will bring Rs 165 crore.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.
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