PNB India declares United Breweries as wilful defaulter
MUMBAI: UB Group holding company United Breweries (Holdings) Ltd on Tuesday said that Punjab National Bank has declared the company as a "willful 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," United Breweries (Holdings), promoted by Vijay Mallya, said in its stock exchange filing. On 13 November 2015, State Bank of India (SBI) had declared United Breweries and Mallya as wilful defaulters, though the company had filed a writ petition against the same in the Delhi high court.
The willful defaulter tag in connection with the loan taken by the company for the now grounded airline Kingfisher Airlines Ltd. Kingfisher Airlines' operating licence was suspended in October 2012 by the Directorate General of Civil Aviation, following a strike by the airline's employees. Overall exposure of lenders is Rs.6,360 crore, which increases to about Rs.7,000 crore, adding unapplied interest. SBI has the maximum exposure to Kingfisher in the consortium at Rs.1,600 crore, followed by Punjab National Bank (Rs.800 crore), IDBI Bank Ltd (Rs.800 crore), Bank of India (Rs.650 crore), Bank of Baroda (Rs.550 crore), United Bank of India (Rs.430 crore), Central Bank of India (Rs.410 crore), UCO Bank (Rs.320 crore), Corporation Bank (Rs.310 crore), State Bank of Mysore, an SBI associate bank (Rs.150 crore), Indian Overseas Bank (Rs.140 crore), Federal Bank Ltd (Rs.90 crore), Punjab and Sind Bank (Rs.60 crore) and Axis Bank Ltd (Rs.50 crore). Meanwhile, SBICAP Trustee Co. Ltd, a wholly-owned subsidiary of investment bank SBI Capital Markets Ltd (SBI Cap), has initiated the process for selling Kingfisher House, the headquarters of grounded airline Kingfisher Airlines, as part of its efforts at recovering loans from its promoter Vijay Mallya. Punjab National Bank's third-quarter profit plunged over 93% as the state-run lender had to set aside more money to cover bad loans and comply with the recent directive of the Reserve Bank of India for making adequate provisions for bad debts.