BANGALORE: Its official now. Vijay Mallya, chairman of the cash-strapped Kingfisher AirlinesBSE -4.78 %, has turned to his ancestral property Kingfisher Towers-Residences at UB City, situated in the heart of Bangalore, to raise Rs 525 crore.
In an August 27 filing to the stock exchanges, titled 'audited financial report for March 31,2012', United Breweries HoldingsBSE 6.13 % (UBHL), the investment arm of the UB Group and to which Mallya's ancestral property is attached, stated that "the company has borrowed Rs 525 crore against this property development, and sale proceeds of completed units would be part utilized to repay such loan".
However, the company did not state from whom and when it raised the money.
Sources close to the development confirmed to TOI that the money has been raised from HDFC, which already has an exposure to Mallya's 1.1-million sq ft mixed-use commercial development UB City, located adjacent to his ancestral home. HDFC's exposure is by way of a rental monetization package, from which Mallya raised Rs 100 to Rs 125 crore. UB City is also attached to UBHL's real estate assets.
When contacted, a UB group spokesperson said, "The UB Group has had long standing relationships with HDFC, and the entire erstwhile brewery land has historically been lying with HDFC. UB Holdings has availed facilities for its general purposes against this security. Individual end uses cannot be identified."
In October last year, TOI had first reported that Mallya might turn to his ancestral property to raise around Rs 600 crore.
Further, UBHL's annual report for the year 2011-12 states that the company sold commercial space measuring 43,822.61 sq ft of saleable super built-up commercial area in UB City. However, the exact amount of funds raised by this transaction were not mentioned.
Kingfisher Towers-Residences at UB City is a 55:45 joint venture between Mallya and Bangalore-based realty major Prestige Group. According to the filing by UBHL, the company owns 4.18 lakh sq ft of super built-up area in the project.
In April this year, Kingfisher Towers recorded the highest residential capital value in the city after an apartment in the upcoming luxury project sold for Rs 33,000 per sq ft. At that price point, Mallya's share of Kingfisher Towers is valued at close to Rs 1,500 crore.
TOI was unable to ascertain whether Mallya's fund-raising exercise from Kingfisher Towers was done to help his ailing airline business. However, at the Kingfisher Airline's AGM held last week in Bangalore, Mallya informed shareholders that the promoters have infused Rs 1,154 crore into the airline since April 2012.