Vijay Mallya, founder of Kingfisher Airlines Ltd., will use proceeds from the sale of a stake in United Spirits Ltd. to pare the Indian carrier’s $1.6 billion debt, reversing his earlier stand, as lenders mount pressure.
Mallya is in discussions with banks “on ways to bring down their exposure, interalia, from the proceeds of the Diageo transaction,” Prakash Mirpuri, a spokesman for Mallya’s UB Group, said in an e-mailed response. The group has not got any “formal communication” from the banks, he said.
Diageo Plc in November agreed to pay 111.7 billion rupees to acquire a 53.4 percent stake in India’s biggest whiskey maker, which is controlled by Mallya. Pratip Chaudhuri, chairman of State Bank of India, one of Kingfisher’s creditors, said yesterday that lenders can sell shares of United Spirits and other group companies held as collateral to recover part of the loans.
15/02/13 George Smith Alexander & Anto Antony/Bloomberg
