After being pursued for years by a consortium of banks, former liquor baron Vijay Mallya has offered to pay ₹4,000 crore of the ₹9,091 crore he and his now-defunct Kingfisher Airlines owe the lenders.
According to a proposal submitted to the Supreme Court on Wednesday, Mallya has agreed to pay ₹2,000 crore up front and an additional ₹2,000 crore by September. The proposal was put forward after Mallya had two rounds of discussions with the lenders through video conferences, agencies said.
Asked by the SBI counsel where Mallya is residing right now, Vaidyanathan said he is still abroad. Mallya has been summoned to appear before the Enforcement Directorate on April 2 under the provisions of the Prevention of Money Laundering Act, but it is not clear if he will do so now.
An SBI spokesperson said the lenders are examining the proposal, but disclosed no details. Apart from ₹4,000 crore, Mallya has agreed to pay an additional ₹2,000 crore if he wins a case against GE Corp.
Banking sources told BusinessLine that SBI is keen to ensure that the interests of all the banks are sufficiently protected before it takes a decision.
Sources said if the proposal is accepted, Mallya will be forced to disclose the source of the ₹4,000 crore he has agreed to pay.
Stake sale One of the ways in which Mallya can mop up ₹4,000 crore is through the sale of the nearly 32 per cent that he and his associate companies hold in United Breweries –– although a quarter of that is pledged. At the current price, the sale of these shares can yield ₹7,141 crore. Mallya’s 22 per cent stake in Mangalore Chemicals & Fertilisers is worth ₹104 crore; and his 52 per cent stake in UB Holdings can yield about ₹72 crore. Some parts of his stake in each of these companies are pledged, and the sale of unencumbered shares will leave him with practically nothing of the $1.2-billion business empire that he once presided over.
JN Gupta of the proxy advisory firm Stakeholders Empowerment Services said the banks would have to take a decision on the proposal based on the watertight documents they have with regard to Mallya’s assets. “Now that he has agreed to repay part of the amount, he can be forced to part with more,” Gupta said.