UBHL auditors' concern over exposure to KFA
Mumbai: Auditors of United Breweries Holdings Ltd (UBHL), the holding company of Vijay Mallya-led UB Group, have raised concerns over its significant financial exposure of Rs 13,500 crore to the grounded carrier Kingfisher Airlines. UBHL has made "no provision in the accounts for the probable loss that may arise on account of financial exposures (to Kingfisher)," auditors have said.
In their 'limited review report' for the October-December quarter financial results of UBHL, the auditors have said the entity has financial exposures to the tune of Rs 13,538.12 crore to Kingfisher, which is "under severe financial constraints and its operating licence stands suspended".
The auditors, Vishnu Ram & Co, said that certain aircraft lessors and bankers have invoked corporate guarantees given by the company on behalf of KFA. The total amount invoked and outstanding as on December 31, 2012, is Rs 964.79 crore.
UBHL's financial exposure on account of Kingfisher Airlines as on December 31, 2012, include investment in equity of Rs 2,109.31 crore, guarantees given to banks Rs 6,631.35 crore, guarantees to aircraft lessors Rs 2,135.6 crore, advances given Rs 2,271.64 crore, and interest, commission, logo fees receivable Rs 390.22 crore.