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Vijay Mallya's USL exit: Kingfisher Airlines lenders to move DRT

The association of 17 lenders to the long grounded Kingfisher Airlines have decided to approach the Debt Recovery Tribunal (DRT) against the airline Chairman Vijay Mallya to place their bets on the USD 75 million compensation package he will be receiving for quitting United Spirits (USL).

Last week, Mallya resigned as chairman of USL after Diageo, the majority owner of the country's largest liquor company, decided to pay him USD 75 million (Rs 515 crore) that has since come under glare of markets regulator Sebi and minority shareholders.

Mallya and Kingfisher Airlines have Rs 7,800 crore unsettled to a consortium of 17 lenders headed by State Bank of India.

Other lenders include PNB, BoB, Canara Bank, Bank of India, Federal Bank, Central Bank, Uco Bank and Dena Bank among others. As part of the agreement, Diageo said it would recompense USD 40 million immediately to Mallya with the balance being settled in equal installments over five years.

It will also remit Mallya of all liabilities over alleged financial irregularities at the company founded by his family.

A day after Mallya announced his departure from USL, UBHL said it would follow the case against Mallya. Diageo is the bulk shareholder of USL with a 54.78 per cent holding.