USL loan dispute: UB Holdings appoints arbitrator

United Breweries Holdings Ltd (UBHL) has appointed an arbitrator in its dispute with its erstwhile group company United Spirits Ltd (USL), now controlled by Diageo, over Rs 1,337.41-crore loan agreement.
USL is now claiming a payment of Rs 1,337.41 crore, along with interest, and has invoked arbitration.
"USL has invoked the arbitration clause in the agreement and has appointed one arbitrator. Similarly, the company (UBHL) has also appointed one arbitrator in terms of agreement," UBHL added. "The process of arbitration has commenced."
UBHL too has initiated arbitration proceedings against the Zuari group over its dispute on shareholders' agreement for Mangalore Chemicals and Fertilizers Ltd (MCFL).

The UB group, the original promoter of MCFL, which has share dispute with Zuari Fertilisers and Chemicals and now owns 53.03 per cent of MCFL, has invoked arbitration, UBHL said in a BSE filing.
"Since certain disputes have arisen out of shareholders agreement (SHA) with the Zuari group, the UB group has invoked the arbitration clause in SHA and have referred the dispute to an arbitrator," said UBHL in footnote of its 2015-16 results.

Lenders of the defunct Kingfisher Airlines (KFA) have invoked the company's corporate guarantee demanding a payment of Rs 6,203.35 crore and filed application before debt recovery tribunals .

SBI Cap Trustee, the trustee of the consortium of banks of KFA, took possession of Kingfisher Villa in May, which has been challenged.
"Although, the possession of the KF Villa property has been taken over by the consortium of banks, the legal ownership of the property still remains with the company," said UBHL.
It is defending recovery proceedings by the consortium of banks of KFA based on corporate guarantees, the validity of which is being contested too.
"Under the direction of court pending resolution of various disputes, an amount totaling Rs 794.38 crore are held as cash deposits," it said.

UBHL contended that the "market value of the company's properties and investments are significantly higher than the caring value".
"The operations of UBGCL (a division of the company) are generating substantial revenue on a regular basis. Revenue is being generated from the logo fee contracts with various other companies. The company is receiving dividends on its investments," it added.
The rental revenue is also generating cash inflows and "this would substantially increase when the embargo to renew or take on fresh lease is lifted by the high court".