Vijay Mallya loan recovery: On June 23, under the leadership of SBI, banks will sell 6200 crores worth of Vijay Mallya’s shares. Know how this sale can affect retail investors.
The bank will sell the shares under the bulk deal.
This is bad news for fugitive liquor baron Vijay Mallya. Banks are gearing up to pay off their loans. Under the leadership of SBI, banks have announced to sell its 6200 crore worth of stocks on 23 June. Vijay Mallya holds major stake in United Breweries, United Spirits and McDowell Holding companies. The bank will sell the shares under the bulk deal.
According to the report published in Money Control, if the bulk deal of shares is completed, then it will be a big victory for the banks in the direction of recovery of dues on Vijay Mallya. Mallya’s ultra premium airline Kingfisher was grounded in October 2012 due to the financial crisis. Vijay Mallya was declared an economic fugitive in January 2019. Mallya left India on 2 March 2016.
Shares will be sold under DRT supervision
According to the report, the sale of shares worth 6200 crores will be done under the supervision of Debt Recovery Tribunal (DRT) based in Bangalore. If this bulk deal fails, the bank will sell the shares in the retail market. It will start from June 24.
Mallya is a defaulter of 17 banks
Mallya is a defaulter of 17 banks and the total outstanding of these banks is Rs 9000 crores. The interest portion is different. This is only the principal. Apart from SBI, Mallya owes banks like PNB, IDBI Bank, Bank of Baroda, Allahabad Bank, Federal Bank, Axis Bank. These banks gradually gave loans against Mallya’s personal guarantee.
how many shares in which company
According to the information, 22 lakh shares of McDowell Holding will be sold. This week the stock closed at the level of Rs 62.30. Rs 68.45 is the 52-week high while Rs 20.60 is the lowest level. 4.13 crore shares of United Breweries will be sold. The closing price of its share this week is Rs 1366.75. Rs 1433.95 is its 52-week high while Rs 897 is its lowest level. 25.02 lakh shares of United Spirits will be sold. Its closing price for this week is Rs 672.75. The 52-week high is Rs 679 and the lowest level is Rs 494.
Know the different values of its shares
According to the current value of the shares of these three companies, 13.8 crores will come from the sale of McDowell Holdings shares. 5565 crores will come from the sale of UBL and Rs 165 crores will come from the sale of shares of United Spirits.
Retail investors may suffer
As we have seen, United Spirits shares are at 52-week high. United Weberies and McDowell are also close to the highest level. In such a situation, banks do not want the shares to be sold in the open market, as this can lead to a huge fall in the price. Its loss will also be on the existing retail investors.
ED has attached assets worth 12 thousand crores
ED has attached Vijay Mallya’s assets worth 12 thousand crores. On May 24, the PMLA court told the banks that they can repay their loans by selling the attached property on behalf of the ED. This was big relief news for the banks.
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