Despite Kingfisher Airlines being neck-deep in debt, Vijay Mallya's Group took on the State Bank of India (SBI)-led consortium of banks on Thursday contesting their claim that the brand Kingfisher had been hypothecated to them.
The company issued a statement saying, "United Breweries Limited (UBL) is the owner of brand Kingfisher, registered under the respective trademark classes pertaining to alcoholic beverages. The brand Kingfisher has not been hypothecated or pledged by the company to any lender to secure its loans."
MUST READ:Kingfisher's woes won't end with just fund infusion
The lenders hope to recover up to Rs 1,000 crore of their dues by monetising the securities in the March quarter itself, SBI deputy managing director (mid-corporates accounts) Shyamal Acharya told journalists in Mumbai on Thursday.
Acharya explained that the consortium of 17 banks has an outstanding of more than Rs 7,000 crore owed by the carrier but has shares of listed entities like United Spirits as collaterals which should realise Rs 500 crore. "That apart, they have the brand Kingfisher as a security," he added.
However, UBL issued the statement contradicting the claim, which is bound to set stage for fireworks ahead as analysts expect Mallya's companies to take legal recourse on the issue, which could delay the collection of money by the banks.
Acharya said that additionally, the consortium has a residual right over securities held by Srei Infrastructure Finance, which comes to Rs 500 crore. Srei bought this from ICICI Bank in April last year. "These are low-hanging fruits which should give us Rs 1,000 crore. Balance is corporate guarantees, personal guarantees and properties," Acharya said adding that the total collaterals held by the banks comes at Rs 6,500 crore.
However, according to official sources, the banks will have to wait till the department of revenue initiates the recovery of more than Rs 400 crore, which the carrier owes due to defaulting on tax payment. According to sources, the banks are expected to discuss the issue of recovering their loans with the finance ministry soon as the revenue department will have precedence over them in recovering tax dues.
Courtesy: Mail Today