Millennium Post

The day after: SBI says Kingfisher lenders to keep selling USL shares

Armed with a favourable order from the Bombay High Court, the State Bank of India on Wednesday said the lenders to the Vijay Mallya-promoted Kingfisher Airlines will continue selling shares of the group company, United Spirits, pledged with them.

'There's no stay (from the court), so there's no reason we will not do that (continue to sell the shares),' Shyamal Acharya, deputy managing director in-charge of mid-corporates at State Bank of India, the lead-lender among a group of 17 banks, told reporters here.

He was reacting to Tuesday's high court order which refused to give any interim relief to Mallya who sought to restrain banks from selling USL shares pledged with the lenders for the next three weeks.

Acharya said the lenders have already sold around 7.3 lakh of the 26 lakh shares of USL pledged with them, in tranches at 'good prices'.

However, it is learnt that the average realisation of banks has been around Rs 1,840 per share.

Banks have already sold the pledged shares of Mangalore Chemicals and Fertilisers, realising around Rs 100 crore. Mallya and group companies have pledged over 97 per cent of the USL shares with various banks and others, which according to current market prices is worth over Rs 6,500 crore.

Without disclosing a number, Acharya said the core group of lenders has given a floor-price to be protected in the share sale.

'SBI Caps is the trustee of the shares; they have been given a floor-price and they are selling in lots and we have got good prices so far,' he said.

Kingfisher owes over Rs 7,500 crore to banks and the action by lenders is seen as a big jolt to Mallya's plans of reviving the airline as well as completing the stake sale in USL to Diageo, announced last November for over Rs 11,000 crore.
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