The Karnataka high court has urged the UB Group comprising UB Holdings and Kingfisher Airlines to come up with a concrete plan on how it intends to pay dues worth around Rs 330 crore (Rs 3.3 billion) towards a clutch of aircraft lessors.
Eight aircraft lessors had over the past six months filed petitions in the high court seeking to get back the money from the grounded Kingfisher Airlines. A hearing for all these petitioners against UB Holdings was conducted late on Friday and the court said UB Holdings should submit a concrete plan to settle this issue, failing which the winding up petition would be pursued.
The top brass of UB Holdings, including UB Group president and chief financial officer Ravi Nedungadi, attended the court proceedings. UB Group’s legal counsel Holla and Holla has submitted that it will be able to furnish a deposit of Rs 100 crore (Rs 1 billion) as soon as the Reserve Bank of India clears the United Spirits [ Get Quote ] stake sale to Diageo.
According to information available, the winding up petitions were filed by IAE International Aero Engines, Rolls Royce and Partners, RRPF Engine Leasing, BNP Paribas, ATR, SM6, Wells Fargo Bank and Aerotron.
The court’s directive is a fresh blow to the UB Group which has been battling many a fire over Rs 7,000 crore (Rs 70 billion) debt raised by Kingfisher Airlines and also over dues to various other stake holders such as employees, airport operators and oil marketing companies. The grounded airline’s lenders, led by State Bank of India [ Get Quote ], have been preparing steps to recall the debt. Lenders are also aggressively looking at encashing the pledged shares of United Spirits to recover a part of the dues as a first step. The management of the UB Group had said that it would work closely with the lenders for an orderly sale of shares held by the lenders.
Even as the legal battle goes on, there was some ray of hope for the UB Group as its much-awaited stake sale of United Spirits to Diageo got the final nod from Competition Commission of India and also from Securities and Exchange Board of India, though with some riders. As and when RBI gives its nod to the deal, UB Holdings is expected get as much as Rs 2,200 crore (Rs 22 billion) inflow, which can be used partly to assuage the lenders of Kingfisher Airlines.
Source : Rediff