Lenders speed up sale of Mallya cos pledged shares

Written by feBureau | Mumbai | Updated: Apr 5 2013, 08:24am hrs
Total stake of UBHL in United Spirits down from 17.75% to 15.73% due to sale of 26.46 lakh shares

There seems to be more trouble brewing for companies owned by Vijay Mallya, who is in the midst of closing a deal with UK-based spirits major Diageo. According to the latest data available with stock exchanges, the consortium of lenders led by the State Bank of India (SBI) seem to have sold the entire chunk of 26 lakh pledged shares of United Spirits.

Further, if the number of block deals is anything to go by, then it seems that the lenders have even started off-loading shares of Kingfisher Airlines. Meanwhile, in another development, McDowell Holdings has pledged 3.6% of its 4.05% stake in United Breweries.

According to a stock exchange disclosure, the total stake of United Breweries (Holdings) in United Spirits has gone down from 17.75% to 15.73% due to the sale of 26.46 lakh shares.

Interestingly, this is the number of shares that is held by the consortium of 18 banks led by SBI.

The change in shareholding has occurred due to invocation of pledge by the lender in whose favour pledge was created, stated the announcement. The lenders appear to have accelerated the sale activities after UB Holdings failed in its attempts to block the selling by filing a case in the Bombay High Court.

According to the submissions made before the court on Tuesday, the banks had sold a total of 7.30 lakh shares in three tranches.

The court, however, refused to grant any interim stay in the matter.

Shares of UB Holdings were locked at their lower circuit of 5% on Thursday to close at R39.60.

Meanwhile, the Kingfisher Airlines counter has been witnessing a number of block deals in which shares are being sold in small tranches.

According to Bloomberg data, around 25 lakh shares of Kingfisher Airlines have been sold through block deals in the last two days.

While it could not be confirmed whether the selling was by lenders, dealers say that there are not many day traders in the counter due to the negativity surrounding the company and most of the blocks are being offered by those who have the pledged shares in their custody. Shares of Kingfisher lost nearly 4% to close at R8.11 on Thursday.

Meanwhile, even as lenders continued their selling spree, another group company McDowell Holdings announced that it has pledged 3.6% equity stake out of its total holding of 4.05% in United Breweries. Excluding the pledged shares, the stake of McDowell Holdings has fallen to only 0.45% in United Breweries.