Public sector bank Punjab National Bank (PNB), which recently disappointed the markets after posting huge losses in its previous quarterly results, joined its peer SBI in declaring Vijay Mallya-led United Breweries Holdings a 'wilful defaulter'even as the latter is consulting lawyers to challenge the decision.
Following the news, shares of United Breweries Holdings Ltd crashed 12.3% to trade at Rs 19.90 on BSE in mid-day trade.
In a release issued to BSE, United United Breweries Holdings Ltd (UBHL) said said Punjab National Bank vide letter dated February 11, has declared the company a "Wilful Defaulter", adding it received the letter on Monday.
For being tagged as a wilful defaulter and its future course of action, UBHL said: "The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard."
In November, State Bank of India had declared Mallya, Kingfisher Airlines and its holding company United Breweries Holdings as wilful defaulters.
A bank consortium led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year in a bid to recover a part of Rs 6,963 crore debt due from the now grounded Kingfisher Airlines.
Punjab National Bank had an exposure of Rs 800 crore to the defunct carrier.
The airline, owned by flamboyant liquor baron Mallya, had taken Rs 6,900 crore from a consortium of 17-lenders led by SBI in early 2010 after a second debt restructuring for the
airline. The lenders had claimed that United Breweries (Holdings) Ltd and Vijay Mallya were guarantors to the loans.
SBI has an exposure of Rs 1,600 crore to the airline. Out of this, the bankers, which recalled the loan in February 2013, could recover only around Rs 1,100 crore after selling pledged shares of UB Group companies.
Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank of India (Rs 410 crore).
UCO Bank has to recover Rs 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).
With inputs from Agencies