Vijay Mallya must scrape together INR5bn to prevent the sale of pledged shares in United Spirits

The head of The UB Group has been told he must provide a personal guarantee of INR5bn (US$91.9m) to obtain a four-week protection period against lenders hoping to sell a portion of pledged shares in the United Spirits (USL) division.

Vijay Mallya, the chairman of The UB Group, was hit by the demand by the Bombay High Court earlier today (2 April). A consortium of lenders, comprising 17 banks led by the State Bank of India (SBI), is seeking to retrieve money lent to the group for its struggling Kingfisher airline.

The consortium was given pledged shares in United Spirits in return for the loans.

Mallya had previously filed a petition through UB Holdings seeking to prevent the sale of these shares, after the SBI last week sold a portion of them in the open market amounting to INR1bn.

The move could jeopardise his deal with Diageo for United Spirits, for which he today announced open offer details.

No one was available from UB Group spokesperson to comment on how the company will respond to the court’s condition.