Along with UB Holdings, his primary holding company, besides some other firms, Mallya holds a 37.5 per cent stake in United Breweries, the country's largest brewing company with a market capitalisation of around Rs 21,600 crore. Mallya's total holding in the company is valued at about Rs 8,000 crore. Though neither Mallya nor UB Holdings have pledged these shares directly to the Kingfisher Airlines lenders, the former has given personal and the latter corporate guarantees for the now-grounded airline's Rs 8,000-crore-odd debt. So, technically, lenders have recourse to these shares.
According to Sajan Poovayya, managing partner of Poovayya & Co, a leading law firm, lenders can file a summary suit action, as the process of enforcing guarantees is much faster through this route. Simultaneously, the lenders could also move the Debt Recovery Tribunal (DRT) and restrain the promoters from alienating their assets. "There have been many instances when guarantors' assets have been encashed. It's surprising that Kingfisher lenders have not yet moved on this. I am not sure of the reason for that," Poovayya said.
When contacted by Business Standard, senior officials from the lenders' consortium indicated they were looking at this option seriously and might look at various routes on how they could access the United Breweries shares held by Mallya and promoter companies.
If the lenders decide to go ahead with this move and try to encash United Breweries shares, Dutch brewing major Heineken, which also owns a 37.5 per cent stake in the company, will emerge as the single largest shareholder. If that happens, Mallya might lose control over this asset, too.
Among other group companies in which Mallya has lost or had to share control, Diageo already has board control over United Spirits. An intense tussle is on between Deepak Fertilisers and Zuari Group to gain control over Mangalore Chemicals & Fertilizer.
Senior UB Group officials, however, added that they were working to settle the issue of Kingfisher Airlines, squarely saying they were not going to let the issue stay "suspended in mid air".
The consortium of 17 banks has tried hard to get back as much from UB Group as possible by enforcing various securities and assets directly pledged with them over the past two quarters. It is understood to have recovered around Rs 1,000 crore worth of loans through these measures.
The lenders have been quite aggressive after announcing they were recalling the loans to Kingfisher Airlines. They had also refused to part with the 2.38 per cent United Spirits stake pledged with them to facilitate Mallya's transaction with global spirits major Diageo, in which United Spirits is divesting close to 27 per cent stake.
"We believe this refusal is in clear breach of applicable contractual arrangements and we are taking steps to expedite release of the security to enable the balance sale under the share-purchase agreement," UB Group had recently said.