United Spirits drops after HC allows banks to sell shares

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26 Aug, 2025 12:21

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Moneycontrol Bureau

United Spirits (USL) shares fell around 2 percent to Rs 1,836 after the Bombay High Court (HC) on Tuesday allowed banks to sell company shares. USL's parent UB Holdings had sought a stay on banks from selling shares which were pledged as security against loans to  another group company Kingfisher Airlines (KFA).

Also read:  Bombay High Court allows SBI to sell USL shares

The court order means that lenders to KFA are free to sell shares of the subsidiary companies of the UB Group which had pledged shares with lenders under an agreement signed around three years ago.

A consortium of 17 banks led by SBI Caps have already begun the process of sale of shares after KFA defaulted on payments. Banks have an exposure of around Rs 7,500 crore to KFA.

According to reports, banks have already sold one crore shares of group company Mangalore Chemicals and Fertilisers.

There are another 23 lakh pledged shares with banks which are also likely to be sold off to recover dues.

UB Group chairman Vijay Mallya had sought a stay from the HC after State Bank of India sold a portion of USL shares to recover debt. This development will not only impact KFA's plan to resume operations but also act as a hurdle for USL to complete the stake sale transaction with UK-based Diageo.

In November last year, Diageo bought 27.4% stake in USL and is likely to launch an open offer to increase its stake to 53.5% on April 10