Mallya’s UBHL says no default on interest payment to USL

New Delhi :Vijay Mallya-led United Breweries (Holdings) Ltd today said it has not defaulted on payment of interest to its erstwhile group firm United Spirits Ltd (USL), a day after USL said it is initiating process to recover dues totalling Rs 1,337 crore.

“In July 2015 the above loan which was to be repaid in instalments to commence from November 9, 2018, has been recalled by USL citing defaults in payment of interest which is denied by the company,” United Breweries (Holdings) Ltd (UBHL) Chairman Vijay Mallya said in a BSE filing.

United Breweries (Holdings) Ltd said “at an EGM of United Spirits Ltd on November 28, 2014, the said loan agreement dated July 3, 2013 between the company and USL was not approved.”

“Consequently the company has not accounted for any interest on the loan with effect from October 1, 2014,” the company added.

Yesterday, UK’s Diageo-controlled USL alleged irregularities and potential violations of law in diversion of funds by the firm’s erstwhile promoter Mallaya-led UB Group and said it is initiating process to recover dues titling to Rs 1,337 crore.

In its first quarter earnings statement, USL said certain pre-existing loans, deposits or advances exited on its books as on March 31, 2013 which were consolidated into as unsecured loan to United Breweries (Holdings) Ltd. Such dues, together with an interest of 9.5 per cent per annum, aggregated to Rs 1,337.40 crore.

After Diageo gained control of the firm, an inquiry was initiated which has found that between 2010 and July 2013 transactions showed lower exposure of the company to UBHL than what actually existed.

UBHL said in view of the restraints imposed by High Court of Karnataka, in pending winding petitions filed by certain other creditors, “the company is seeking legal advise in this regard.”