The consortium of 17 lenders to the long-grounded Kingfisher Airlines have decided to move the Debt Recovery Tribunal (DRT) against the airline chairman Vijay Mallya to stake claim on the $75 million severance package he will be getting for quitting United Spirits (USL).
Last week, Mallya quit as chairman of USL after Diageo, the majority owner of the country’s largest liquor company, agreed to pay him $75 million (R515 crore) in a sweetheart deal, that has since then came under markets regulator Sebi glare as well as minority shareholders.
“Since Mallya had given personal guarantees for the loans given to Kingfisher, this money (which he will receive from Diageo) belongs to us. We have decided to move to the DRT to claim that money,” said a senior bank official.
Mallya and Kingfisher Airlines owed R7,800 crore to a consortium of 17 lenders led by State Bank of India which had an exposure of over R1,600 crore to the now defunct airline.
Other lenders include PNB, BoB, Canara Bank, Bank of India, Central Bank, Federal Bank, Uco Bank and Dena Bank. As part of the deal, Diageo said it would pay $40 million immediately to Mallya with the balance being payable in equal installments over five years.
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