A day after Vijay Mallya, founder chairman of United Spirits Ltd (USL), struck a deal with Diageo for dropping all charges of irregularities against him, the USL management has said the loan recovery process from Mallya-controlled United Breweries (Holdings) Ltd will continue.
The USL reserves the right to pursue loan recovery process against UBHL, which owes a sum of R1,337.40 crore (together with interest) to USL, a top company official said.
According to Anand Kripalu, managing director, USL, the company would continue to pursue with UBHL the possibility of recovering these dues even though Mallya shifts to London. “Mallya may move to London. This is a loan agreement between USL and UBHL. UBHL is not going to London. So quite clearly, we are reserving the right to pursue and continue to pursue loan recovery. This agreement will in no way compromise our position,” Kripalu said in an analyst call on Friday.
Responding to queries, he said USL has already recalled the loan and will explore all actions that are available at its disposal to recover that loans.
By way of an agreement in July 2013 both USL and UBHL had agreed to consolidate all dues aggregating to Rs 1,337.40 crore as an unsecured loan. As per the terms of the said loan agreement, interest payable by UBHL to the company in January 2015 amounted to R191.10 crore (gross of tax) and a further interest amounting to Rs 127.05 crore was due in January 2016. However, the United Spirits is yet to receive such interest payments from UBHL.
The company received letters from UBHL stating that it is involved in litigations with various creditors of Kingfisher Airlines in different courts all over the country. Also, some of the winding up petitions filed against UBHL have been admitted by the Karnataka High Court and due to court orders passed in winding up proceedings it is unable to pay such sums without leave of the court which it proposes to seek, USL said in a filing to BSE during the December quarter results.
“We have made provisions for the UBHL loans. However, the company retains full right to pursue with UBHL for the recovery of loans,” Kripalu added.
Sanjiv Churiwala, chief financial officer, USL, said the company would get 13 residential properties of USL valued to ascertain the exact value as per today’s market prices. “The fair value of these properties was Rs 290 crore about two years ago. “We believe current value should be significantly higher subject to valuation to be done,” he said.
Kripalu said the company also reserves the right to sell the IPL team Royal Challengers Bangalore.
“We are very clear that we will leverage all our assets including our subsidiaries and RCB team to extract full value for USL. This year, for instance, we are going to be driving even more convergence between the brand levery of Royal Challenge as a product and Royal Challengers Bangalore, the cricket team because the opportunity to extract value by making consumers and people see these as synergistic together,” Kripalu said.