#BargainLikeABaron: Banks evaluating Rs 4,000 cr proposal; Mallya may sell UB stake to Heineken

Lenders to defunct Kingfisher Airlines on Wednesday said they have received an offer to settle loan from the company and they will examine the proposal. Liquor baron Vijay Mallya and Kingfisher Airlines earlier submitted a proposal in the Supreme Court for repayment of Rs 4,000 crore out of the loan amount of Rs 6,903 crore to the consortium of banks, led by State Bank of India, by September this year. “The consortium of banks led by SBI confirms receipt of an offer for settlement of dues from Kingfisher Airlines Ltd. The bank, along with other consortium members, will examine the same,” SBI said in a statement. [caption id=“attachment_2704608” align=“alignleft” width=“380”]  Vijaya Mallya and SBI chief Arundhati Bhattacharya[/caption] The statement, however, did not disclose the amount Mallya has offered to repay to the banks. The proposal for repayment in the Supreme Court was submitted by Mallya, Kingfisher, United Breweries (Holdings) Ltd and Kingfisher Finvest (India) Ltd. A bench comprising Justices Kurian Joseph and R F Nariman allowed the consortium of banks a week’s time to respond to the proposal and posted the matter for further hearing on April 7. On March 9, the government had informed the apex court that Mallya, who is facing legal proceedings for allegedly defaulting on loans of over Rs 9,000 crores from various banks, had left the country a few days back. However, a report in The Times of India said the banks are vary of the offer as Mallya has never co-operated with them on the dues matter. Mallya made the offer for repayment through two video conferencing with the SBI, his counsels informed the court earlier in the day. Another report in the same newspaper, meanwhile, said the industrialist, who is estimated to be worth Rs 7,000 crore, is likely to sell his stake in United Breweries to partner Heineken in order to arrange funds for settlement with the banks. “This offer will be met from two sources — shares in UBL and a residual stake in United Spirits. Mallya will have to offer shares to Heineken as the latter has pre-emptive rights on them,” a source close to Mallya has been quoted as saying in the report. Reuters had earlier this month reported that Heineken is likely to ask Mallya to step down from the board of United Breweries. Three sources told the news agency that such a move would likely be a prelude to the Dutch drinks major raising its stake in the maker of Kingfisher beer to above 50 percent. Heineken acquired a 37.5 percent stake in United Breweries in 2008 through its takeover of Scottish & Newcastle and has since increased its holding to 42.4 percent. With Mallya distracted by debts from a collapsed airline venture, this could be a timely grab by Heineken in a market that is growing much faster than the global average, the report had said. Mallya and Kingfisher Airlines owe Rs 7,800 crore to the consortium led by SBI, which had an exposure of over Rs 1,600 crore to the airline. Other lenders include Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Central Bank of India, Federal Bank, UCO Bank and Dena Bank. Last year, SBI declared Mallya as wilful defaulter while Punjab National Bank had also declared him, his group holding company United Breweries Holdings and Kingfisher Airlines as wilful defaulters last month. With PTI