The Vijay Mallya-led United Breweries Holdings Ltd (UBHL) is seeking shareholder approval to increase its borrowing limit by an additional R1,500 crore to finance the firm?s activities. UBHL, which is a holding company of the UB Group, said the approval will only be an enabling resolution to borrow funds at an appropriate time.
The firm on Wednesday informed the Bombay Stock Exchange it would hold a postal ballot to raise the borrowing limit to R5,000 crore from R3,500 crore at present. ?The board is of the opinion that additional borrowings will be required to supplement the need for finance for the company’s activities,? the notice for the ballot said. ?This is an enabling resolution and the board may borrow funds as and when considered appropriate.?
Earlier this year, the company received shareholder approval for an enabling resolution to revise the lending limit to Kingfisher Airlines to R750 crore from R350 crore.
UBHL, which posted total income of R759 crore in FY13, earns its revenue from sale and lease rentals from its property in Bangalore, trademark licence fees, dividends and guarantee commissions from its group firms.
The company has been under pressure as the lenders to the grounded Kingfisher Airlines are moving to monetise the collateral they hold and invoke the corporate guarantees.
In May, the Karnataka High Court allowed the company to sell 13.61 million shares it holds in United Spirits to conclude its deal with Diageo, but also ordered it to deposit R250 crore in the court after closing the transaction. The court also restrained the company from creating new pledges or encumbrances on assets till the winding-up petitions filed against it were disposed of.
The firm is contesting five winding-up petitions in the HC filed by the aircraft lessors to Kingfisher Airlines. In turn, it has filed a suit for damages with a claim of R1319.30 crore against some of these petitioners in the city civil court, Bangalore. Separately, the firm has sought damages of R3199.68 crore in a suit it has filed in the Bombay HC seeking an injunction to restrain the consortium of bankers from selling the collateral and invoking the corporate guarantees given by the company.
