UB Group chairman Vijay Mallya on Thursday said the group’s parent company United Breweries Holdings (UBHL) is in dialogue with two of its creditors, who have filed winding up petitions against the company, for an out-of-court settlement.
The holding company is contesting five winding-up petitions filed by the aircraft lessors and financiers of Kingfisher Airlines (KFA) in the Karnataka High Court, which had asked it to deposit R250 crore in the court from the proceeds of the Diageo deal.
“Out of these five, we have serious counterclaims against three of the petitioners, which basically leaves two petitioners with whom we are in dialogue for an out-of-court settlement,” Mallya told reporters after the company’s annual general meeting. However, he did not specify which of petitioners he is talking to.
The winding-up petitions against UBHL had been filed separately between March and November 2012 by Rolls-Royce and Partners Finance, BNP Paribas, Avions de Transport Regional GTE and IAE International Aero Engines.
In July, the consortium of banks, which lent to KFA, also approached the court seeking the proceeds from the Diageo deal as part of their attempt to recover a claim of dues amounting to R6,203 crore from UBHL.
“We dispute not only the amount claimed but we also dispute the guarantees. These are in various stages of being sub judice. There are courts of law in this country to which we are entitled to go. I cannot predict what the decisions will be,” Mallya said. Asked if he was in talks with the banks, Mallya said: “I can’t tell you everything that is going on because there are some things that need to be kept confidential. But let’s put it this way, nobody likes unending litigation.”
Mallya said efforts to revive the airline were continuing but he declined to spell out any plans by UBHL other than what was mentioned in the company’s annual report. “A revival plan has been submitted to Directorate General of Civil Aviation which is under consideration. Further, discussions are in progress with some prospective investors for restarting the airline operations which of course will be subject to statutory and regulatory approvals,” UBHL had said in its annual report for FY13. Apart from its equity investment of R2,095 crore in the airline, UBHL’s exposure includes loans and advances of R2,359 crore besides the corporate guarantees.
Mallya, however, said the value of UBHL’s investments have been at the highest in the history