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At a time when most Kingfisher Airlines creditors lost money, one smart fund manager not only recovered its investment but also deposited an additional ₹650 crore with the Karnataka High Court , which has a receivership in the Kingfisher case.
In mid-2012, when Vijay Mallya’s Kingfisher ran into trouble, India Global Competitive Fund of Srei Venture Capital acquired at a discount the ₹450-crore loan ICICI Bank had given the airline. The loan was backed by shares of United Spirits, then controlled by Mallya.
The value of the deal between ICICI and India Global was not known.
“The deal — to take over the Kingfisher loan account — was ring fenced (that is, backed) by shares of United Spirits Ltd (USL),” Hemant Kanoria, Chairman and Managing Director, Srei Infrastructure Finance, told BusinessLine . Srei Venture Capital is a part of the Kolkata-based Srei Infra.
According to sources, the loan had a collateral of nearly 49 lakh shares of United Spirits. Stock market data reveal that the USL share price moved up from ₹800 to nearly ₹2,900 between 2012 and 2014, in anticipation of international spirits major Diageo’s interest in acquiring USL.
India Global took full advantage of the situation and gradually sold the USL shares it held as collateral. By the time it sold the last share, the Fund had not only recovered with interest its ₹ 600-crore “risky investment”, but another ₹650 crore that it deposited with the Karnataka High Court’s receiver.
Good times for some, at least.
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