In what is being seen as more trouble for the grounded Kingfisher Airlines, one of its creditors — United Bank of India — has filed a winding-up petition against United Breweries Holdings Ltd (UBHL). The petition is pending admission before the Karnataka High Court, it is learnt.
UBHL, which is the holding company of the UB Group, was the guarantor for the loans given by United Bank of India to Kingfisher Airlines (KFA).
United Bank is the first lender in the 17-bank consortium to seek winding up of the guarantor company (UBHL), after KFA defaulted. In comparison, the consortium headed by State Bank of India is looking to proceed directly against KFA for recovery of the dues, estimated at about Rs 7,000 crore.
United Bank of India has an exposure of close to Rs 400 crore to KFA, which includes pre-delivery payment (PDP) financing for aircraft as well as working capital financing.
As UBHL was not able to meet its liabilities arising from non-payment of dues by KFA, United Bank has moved the Karnataka High Court with a winding up petition, sources in the banking industry said.
If the Karnataka High Court were to admit the winding-up petition, then it could frustrate the revival attempts of the grounded airline, say bankers.
This is because the Director-General of Civil Aviation is unlikely to renew KFA’s licence unless the airline is able to produce a no-objection certificate from lenders such as banks and tax authorities. But, with a winding-up petition pending before a High Court, no banker is likely to give a no-objection certificate for the airline to restart operations, say some economy watchers.
There is also an opposite view that any majority support from bankers (on repayment of dues to them) could still tilt the scale in favour of a revival of the airline.