United Spirits to face heat if Kingfisher Airlines left to flounder

Bangalore: If billionaire Vijay Mallya does not infuse cash into the cash-strapped Kingfisher Airlines Ltd or find other ways to mitigate the trouble at the airline, the crisis will have a spillover effect on his other group companies, say analysts.
Take the case of United Spirits Ltd (USL), the flagship alcohol beverages company of the Mallya-led UB Group. The company, say analysts, will come under severe stress if Kingfisher is allowed to flounder.
Though USL has not directly lent to Kingfisher, it has a current outstanding debt of close to Rs 400 crore towards United Breweries (Holdings) Ltd, the group’s holding company, which in turn has supported Kingfisher in a big way.
UB Holdings has around Rs 13,000 crore exposure in Kingfisher — Rs 4,000 crore through debt and equity and Rs 9,000 crore through corporate guarantees to banks and aircraft lessors.
23/08/12 Raghuvir Badrinath/Business Standard

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Categories: Kingfisher Aug 2012