India: Punjab National Bank declares United Breweries Holdings a wilful defaulter

United Breweries Holdings shares slumped nearly 14 per cent on February 16 after the Vijay Mallya-controlled company was declared a wilful defaulter by state-run Punjab National Bank, NDTV reported.

The lender tagged United Breweries Holdings as wilful defaulter for not paying back a loan of Rs. 800 crore given to now-defunct Kingfisher Airlines.

Both Mr Mallya and United Breweries Holdings were guarantors to a Rs. 6,900 crore loan Kingfisher Airlines had taken from a consortium of 17 lenders led by State Bank of India (SBI) in early 2010.

According to the Reserve Bank, a wilful defaulter in one who as a borrower has the ability to pay, but is unwilling to pay.

Punjab National Bank's decision to declare United Breweries Holdings as wilful defaulter comes months after India's biggest lender by assets - SBI - declared Mr Mallya, Kingfisher Airlines and United Breweries Holdings as wilful defaulters in November 2015.

United Breweries Holdings said that it will challenge Punjab National Bank's decision. "The company is in consultation with its legal counsels to challenge the decision by taking appropriate legal action that may be required in this regard," UB Holdings said in a press release.

United Breweries Holdings shares closed 11.5 per cent lower at Rs. 20.10. Shares of United Breweries, another company promoted by Mr Mallya, closed 2 per cent down at Rs. 785.95.

17 February, 2016