Vijay Mallya assures USL of steps to avert impact on operations

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Kochi | Published: July 24, 2015 12:27:05 AM

United Spirits (USL) informed the exchanges on Thursday that Vijay Mallya has assured the company board that he will take appropriate...

United Spirits (USL) informed the exchanges on Thursday that Vijay Mallya has assured the company board that he will take appropriate steps to ensure that the operations of the company are not impacted due to a bank which declared him a wilful defaulter in respect of another company where he is the promoter director. United Bank of India had named United Breweries (Holdings) (UBHL), the holding company of the UB Group, as a wilful defaulter in December 2014 with respect to loans taken by the now-grounded airline Kingfisher Airlines.

Later, the Calcutta High Court rejected UBI’s action of classifying the grounded Kingfisher Airlines, promoted by Mallya, as a wilful defaulter, on technical grounds. The court had observed that the empowered committee in UBI, which decides the wilful defaulter status of a borrower, had four members instead of the mandated three members under the RBI’s norms. USL also informed the exchanges that UBHL has defaulted on interest payment of Rs 191 crore payable as of January 2015 under the loan agreement between the two companies.

The former USL management had granted unsecured loans to UBHL amounting to Rs 1,337.40 crore. USL added in the report that it has received a letter from UBHL, stating that it is involved in litigations with creditors of Kingfisher Airlines in different courts all over the country and as a matter of prudence the company has provided a further amount of Rs 995.46 crore towards the entire balance principal amount in the balance sheet of the last fiscal.

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