UB Holdings up 5% after reducing investment in Kingfisher

Shares of United Breweries Holdings and Kingfisher Airlines, subsidiaries of liquor baron Vijay Mallya-led UB group, locked at 5 percent upper circuit each on Tuesday.

On Monday, UB Holdings modified its earlier resolutions to make loans and investments to Kingfisher Airlines (KFA) within the overall limit of Rs 1,500 crore.

The revision was done to facilitate the conversion of loans given to Kingfisher into convertible/no-convertible securities, as required by the debt recast agreement between the airline and a consortium of its lenders.

"To accommodate further lending to Kingfisher Airlines if required, it is proposed to realign these limits further by increasing the lending limit to KFA from Rs 300 crore to Rs 750 crore and reducing the investment limit from Rs 1,200 crore to Rs 750 crore, thus maintaining the overall limit of Rs 1,500 crore..." UB Holdings said in a shareholders' notice.
   
The company further said that its directors recommend passing of this resolution.

Shareholders of UB Holdings in September 2008 had approved lending funds to Kingfisher to the tune of a maximum amount of Rs 1,500 crore. Later in 2010, the company got approval of shareholders for a revision within this overall limit, pursuant to which the loans for Kingfisher were capped at Rs 300 crore and investments at Rs 1,200 crore.
    
At 10:18 hours IST, shares of United Breweries Holdings were quoting at Rs 64.10. There were pending buy orders of 138,740 shares, with no sellers available.
 
Meanwhile, Kingfisher was quoting at Rs 10.53. There were pending buy orders of 193,224 shares, with no sellers available.

(With inputs from PTI)