Kingfisher Airlines Case: Lenders Led By SBI To Sell Pledged Shares
Mallya’s pledged shares to be sold by lenders in Kingfisher case.
The debt recovery tribunal at Bengaluru has permitted the sale of shares pledged to lenders of the now defunct Kingfisher Airlines Ltd., in a bid to recover loans.
The tribunal, according to a sale proclamation published on its website on June 7, has allowed the sale of 3.96 crore shares of United Breweries Ltd., 25 lakh shares of United Spirits Ltd. and 22 lakh shares of McDowell Holdings Ltd. through block deals on June 23.
In a separate sale proclamation, the tribunal also announced sale of another one crore shares of United Spirits on June 25.
The value of the pledged shares, according to their last closing price, works out to nearly Rs 6,272 crore. The share sale, the proclamation said, will help with recoveries against loans worth Rs 6,203 crore, costs and interest at 11.5% per annum applicable from June 2013 till the date of realisation.
In the event of failure of the block deals on June 23 and 25, the shares will be sold through bulk or retail sales on subsequent trading days, the tribunal said.
The recovery of loans from Kingfisher Airlines will help lenders led by State Bank of India close one of India’s most famous cases of corporate debt default. The airline was grounded in 2012, after it ran into severe debt problems. Lenders have been attempting to recover their dues since then. Among other large lenders to the airline are Punjab National Bank, IDBI Bank and Bank of Baroda.
Apart from the recovery proceedings, the Kingfisher Airlines case is also being investigated by the Central Bureau of Investigation and the Enforcement Directorate for fraud.
As part of their investigations, the CBI previously arrested former officials of IDBI Bank Ltd. for poor credit practices and fraudulent dealings in extending a Rs 900-crore loan to the airline.
In 2016, Mallya, the airline’s promoter, moved to London amid recovery proceedings. He was then tagged as a fugitive economic offender. The Indian authorities have been attempting to extradite him back to the country to pursue legal action.