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PNB declares United Breweries Holdings 'wilful defaulter'

The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard

Press Trust of India  |  New Delhi 

PNB declares United Breweries Holdings 'wilful defaulter'

Vjay Mallya-led United Breweries Holdings Ltd (UBHL) on Tuesday said it has been declared a willful defaulter by Punjab National Bank (PNB) and the company is consulting lawyers to challenge the decision.

Punjab National Bank (PNB) vide letter dated February 11, has declared the company a willful defaulter, UBHL said in a BSE filing, adding it received the letter on Monday.

On its future course of action, UBHL said: "The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard."

In November, State Bank of India (SBI) had declared Mallya, Kingfisher Airlines and its holding company UBHL as wilful defaulters.

A bank consortium-led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year, in a bid to recover a part of Rs 6,963-crore debt, due from the now-grounded Kingfisher Airlines.

PNB had an exposure of Rs 800 crore to the defunct carrier.

The airline, owned by flamboyant liquor baron Mallya, had taken Rs 6,900 crore from a consortium of 17-lenders, led by SBI, in early 2010 after a second debt restructuring for the airline. The lenders had claimed that UBHL and Vijay Mallya were guarantors to the loans.

SBI has an exposure of Rs 1,600 crore to the airline.

Of this, the bankers which recalled the loan in February 2013, could recover only around Rs 1,100 crore after selling pledged shares of UB Group

Other banks that have exposure to the airline include PNB and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank of India (Rs 410 crore).

UCO Bank has to recover Rs 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).

Shares of UBHL were trading at Rs 20.85 in mid-day trade, down 8.15 per cent from previous close on BSE.

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First Published: Tue, February 16 2016. 12:42 IST