Shares pledged by Mallya, group firms in United Breweries up 69%

Lenders to Kingfisher Airlines trying to recover as much as Rs 7,000 crore by selling various assets pledged by Vijay Mallya

UB Group Chairman Vijay Mallya, who is battling high debt across his group companies, primarily Kingfisher Airlines, has reported a 69 per cent rise in the shares pledged by him, as well as his group companies, in United Breweries.

For the quarter ended June, Mallya and his group companies pledged 27.29 per cent of their 37.5 per cent holding in the company, against 16.13 per cent at the end of March.

Dutch brewer Heineken also holds 37.5 per cent stake in United Breweries, which has market capitalisation of Rs 20,000 crore. So far, lenders to Kingfisher Airlines, which are trying to recover Rs 7,000 crore, have been able to recover about Rs 1,500 crore by selling various assets pledged by Mallya. They might consider making good the corporate and personal guarantees provided by Mallya and his holding company, UB Holdings.

If the lenders manage to sell the United Breweries shares, Mallya might lose control of this asset as well, probably in favour of Heineken. Through a Rs 5,200-crore transaction early last month, Mallya had ceded management control of his flagship spirits company, United Spirits, to Diageo.

Kingfisher Airlines reports a loss
Kingfisher Airlines has been weighing heavy on the UB Group. The airline, which ceased operations late last year, reported a net loss of Rs 1,156 crore for the quarter ended June, against a net loss of Rs 650 crore during the corresponding period last year. During the June quarter, it didn’t record any income, against an income about Rs 300 crore in the year-ago period.