New Delhi : Global spirits giant Diageo has said it may not be able to fully recover a loan of USD 135 million given to Vijay Mallya-affiliated Watson Ltd by Standard Chartered Bank where it had acted as a guarantor in case it is asked to pay up.
The world’s largest spirits maker, Diageo, which acquired control of United Spirits (USL) in 2012, had issued a guarantee to Standard Chartered Bank for a USD 135 million (around Rs 900 crore) loan to Watson to release certain USL shares that were to be acquired as part of the deal.
The company said the risk had arisen due to default by Watson in May and Debt Recovery Tribunal (DRT) in Bengaluru preventing sale or any other transfer of such UBL shares in June as part of the enforcement process pending further orders following petition by a consortium of banks led by State Bank of India.
The company said the underlying security held by Standard Chartered includes shares in United Breweries Ltd (UBL) and Watson’s interest in a venture that owns the Force India Formula One (F1) team.
Mallya has been battling a number of cases, including against banks over a ‘willful defaulter’ tag related to loan defaults by the now-defunct Kingfisher Airlines.