Nine years after bankrupt Kingfisher Airlines Ltd was grounded, the State Bank of India-led lenders consortium has managed to recover around Rs 5,833 crore ($787 million) by selling shares pledged against loans.
Lenders sold a 14.98% stake in India's largest brewer United Breweries to Heineken NV, the world's second largest beer maker, via block deals on the stock market on Wednesday. This helped the Dutch brewer Heineken to take controlling stake in United Breweries two years after it had acquired an additional stake of 2.8% in March 2019.
“Heineken NV has acquired 39,644,346 equity shares taking its holding in the company from 46.52% to 61.50%,” United Breweries informed in a stock exchange filing.
The sale was concluded at a price of Rs 1,471.25 per share, according to block deal data on BSE.
The proceeds from the sale will first go to the debt recovery tribunal (DRT) in Bengaluru, which permitted the lenders to proceed with the sale. The tribunal, where banks have approached for the loan recovery, will complete the necessary legal proceedings before transferring the amount to the lenders.
Heineken got an open offer exemption from the Securities and Exchange Board of India (SEBI) to buy the additional stake. Further on June 21, the Competition Commission of India (CCI) said it had approved Heineken International BV's proposed acquisition of an additional equity stake in United Breweries.
Prior to this, bankers have sold Vijay Mallya’s share worth Rs 1,357 crore in United Breweries and United Spirits Ltd (USL). They are also in the process to find buyers to sell more shares worth around Rs 800 crore before June 25.
Recently, the DRT had allowed lenders to sell 3.96 crore shares of United Breweries, 25 lakh shares of United Spirits Ltd and 22 lakh shares of McDowell Holdings Ltd through block deals on June 23.
Mallya is known to own most of these shares in benami names. As per Wednesday's closing price, the shares available in United Spirits and McDowell Holdings, both publicly listed, are valued at around Rs 850 crore.
The multiple share sales will result in a recovery of over 80% against loan exposure of around Rs 9,900 crore (including interest) to Kingfisher Airlines, promoted by Mallya.
Over the past few years, Kingfisher Airlines and Mallya have become the poster boys of bad loans.
Mallya left India for London in March 2016 shortly after lenders to his defunct Kingfisher Airlines declared him a wilful defaulter.
Government agencies including the Enforcement Directorate and Central Bureau of Investigation (CBI) are investigating fraud charges against Mallya for alleged misappropriation of funds received from the banks. Mallya has also been tagged as a fugitive offender.