PNB declares UB Holdings as wilful defaulter, stock tanks 10%

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Moneycontrol Bureau

Shares of United Breweries Holdings tanked 10 percent intraday on Tuesday. Punjab National Bank has declared the Vijay Mallya-controlled company as a 'wilful defaulter'. In December quarter, PNB's gross non-performing assets (NPA) was at 8.47 percent while net NPA was at 5.86 percent. Its provisions surged by a whopping 100 percent at Rs 3775 crore against Rs 1882 crore in Q2.

In a statement to BSE, UB Holdings said that it is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard.

UB Holdings is corporate guarantor to now non-functional Kingfisher Airlines which has huge debt in its head. Lenders have a total exposure of Rs 7000 crore to KFA. Altogether 17 lenders have loaned to KFA. SBI has largest exposure to KFA at Rs 1600 crore and PNB has Rs 800 crore loned to the Mallya's airline.

UB Holdings reported a standalone net loss of Rs 16.31 crore for December quarter against a net profit of Rs 2.02 crore a year ago.

The company said it is contesting claims of Rs 6203.35 crore from a consortium of 17 lenders led by State Bank of India to its group company, the now defunct Kingfisher Airlines.

The Mallya-promoted airline has not made any payment of the loan since January 2012 . The have banks have recovered over Rs 1600 crore by selling real estate and pledged shares after banks recalled those loans in February 2012.

The banks have moved the Debt Recovery Tribunal, Bangalore and the Karnataka High Court and the company said it is contesting their claims. In a previous statement to the exchange, UB Holdings had said that the company continues to treat the disputed amounts as contingent in nature.The company said a bank invoked and sold a portion of the securities pledged by a wholly-owned subsidiary and recovered Rs 51.20 crore, which was adjusted against the dues in Q3. Also, SBI-led bank consortium has decided to auction Kingfisher House in Mumbai on March 17 in a bid to recover a part of Rs 6,963 crore debt due from the now grounded Kingfisher Airlines. The e-auction will be done under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. SBICAP Trustee Company Ltd, which took possession of the property last year, will do e-auction of the 2,401.70 square meter property on March 17.

At 10:56 hrs United Breweries Holdings was quoting at Rs 21.30, down Rs 1.40, or 6.17 percent on the BSE.Posted by Nasrin SultanaFollow @NasrinzStory