Vijay Mallya in talks with Kingfisher lenders

Business Monday 07/March/2016 18:04 PM
By: Times News Service
Vijay Mallya in talks with Kingfisher lenders

Mumbai: Vijay Mallya, the Indian business tycoon who started Kingfisher Airlines, said he’s in talks with lenders to pay the carrier’s dues and slammed the media for what he described as a ‘near-hysterical campaign’ against him.
Kingfisher Airlines was one of India’s leading carriers from 2005 until it stopped flying in 2012 as debt and losses mounted. The airline owes about Rs70 billion ($1.04 billion) to lenders, SBICAP Trustee, leader of a 17-bank consortium, said in a notice on its website last month.
Efforts are being made to reach a one-time settlement with lenders, and any deal will also cover future payments to them, Mallya said in an e-mailed statement to media on Sunday night. Lenders have a total of Rs24.94 billion of cash and securities available to them that they can put toward the dues, the statement said.
Kingfisher’s lenders have recovered a total of Rs12.44 billion in cash from the sale of pledged shares since April 2013, the statement said. In addition, Rs12.5 billion — sale proceeds that Mallya’s United Breweries received from selling United Spirits shares to Diageo — have been deposited with the Karnataka High Court, according to the statement.
“Personally, I am not a borrower or a judgment defaulter,” Mallya said, employing a term used to describe someone who has enough assets to pay his bills but chooses not to pay them. Mallya has been called a ‘willful defaulter’ in Indian media reports and accused of causing ‘continuous pain and agony’ to employees for not paying their salaries.
Bad assets
Mallya is in the spotlight as India’s government grapples with rising levels of stressed assets in the banking system. Mallya resigned last month as chairman of United Spirits, which Diageo bought in April 2014. He received $75 million for signing a five-year non-compete agreement with Diageo.
“I have neither the intention nor any reason to abscond,” Mallya said in the statement. “I feel that the time has come to clarify my position in order to avoid this relentless attack on my reputation.”
Mallya said that by resigning from United Spirits he aimed to ‘gradually’ reduce his business commitments and leave him more time for his family. – Bloomberg News