Days after United Breweries Holdings (UB Holdings) chairman Vijay Mallya bought a cricket team in the Caribbean Premier League, Punjab National Bank has declared UB Holdings as a “wilful defaulter.” State Bank of India had earlier declared UB as a defaulter.
India's defaulting business barons are under pressure after the RBI prompted lenders to be proactive in tackling mounting bad loans. The Supreme Court asked the RBI for a list of companies that are in default of bank loans of more than £50 million, or whose loans have been restructured under corporate debt restructuring schemes. Eleven banks, led by the SBI, has an exposure of £620.3 million to Kingfisher. PNB has an exposure of £80 million and SBI £160 million. “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,” UB Holdings said in a filing with the BSE.
ARCs may get to buy Kingfisher assets.
“Three-four banks are looking to stake sale to ARCs to realise some value out of the Kingfisher Airlines assets that they possess,” sources said. Without disclosing the names of the banks, they added that these lenders are weighing options and are in talks with ARCs. wilful defaulter.
As per RBI guidelines, once declared as wilful defaulters, no additional facilities will be granted to these borrowers by any bank or financial institution. Besides, such companies and promoters will be debarred from the institutional finance for floating new ventures for a period of five years from the date of removal of their name from the list of wilful defaulters.
