MUMBAI- More than a year after one of India’s top airlines, Kingfisher, stopped flying, its flamboyant owner Vijay Mallya is battling against losing control of his $2.2-billion corporate empire.
Mallya, once the self-proclaimed “King of Good Times”, made his fortune in the liquor business and controls a conglomerate spanning beer, airlines, fertilisers and engineering.
But in several firms in his United Breweries Group, 58-year-old Mallya’s ownership has substantially shrunk, while in others, large portions of his holdings are pledged with banks — and in some cases are starting to be sold off.
“The legacy of the empire, which he inherited from his dad, is at risk,” said a Mumbai-based analyst from a group that has lent to Mallya’s companies, asking not to be named.
Mallya, owner of a Formula One team and host of lavish yacht parties with Bollywood stars and politicians as guests, was India’s 29th richest man in 2007, worth an estimated $1.5 billion, according to Forbes.
But pressure on Mallya has mounted over the past two years since Kingfisher Airlines’ fortunes went into a downward spiral, hit by high fuel prices, fierce competition and heavy interest costs.
The company, which has never made a profit since it began flying in 2005, owes vast sums to banks, airports, fuel suppliers and staff, while owners of Kingfisher’s grounded planes have taken them back.