Mumbai, April 17: United Breweries (Holdings) Ltd (UB) has sought approval from shareholders to provide corporate guarantees worth up to Rs 12,000 crore to the lenders of its subsidiary Kingfisher Airlines.

The guarantees will be given by pledging shares as well as by mortgaging its movable and immovable properties.

This is not the first time that Vijay Mallya-led UB is extending a helping hand to the beleaguered airline. In September 2008, the company obtained shareholders’ approval to guarantee loans up to Rs 7,500 crore to Kingfisher. However, Kingfisher has sought UB’s support to enhance the limit to Rs 12,000 crore.

A UB spokesperson said today’s proposal was an enabling resolution at this point of time.

The UB move indicates that Kingfisher Airlines, which is facing a cash crunch, is tapping different sources to raise money. The Vijay Mallya group’s airline posted a net loss of Rs 413 crore in the third quarter ended December 31, 2008.

So far, the airline has piled up a loss of over Rs 1,000 crore in the first nine months of 2008-09.

Under Section 372A of the Companies Act, 1956, a company cannot offer loans or corporate guarantees to any other body corporate exceeding 60 per cent of its paid-up share capital and free reserves or 100 per cent of its free reserves, whichever is higher.

According to a notice to the Bombay Stock Exchange, UB said it had inadequate limits under this head to extend further guarantees to Kingfisher Airlines.

Therefore, it is seeking approval from shareholders to enhance this limit.

The guarantees to lenders pertain to financing arrangements for domestic and international operations, acquisition of aircraft, capital expenditure, working capital, strategic investments and re-organisation by Kingfisher Airlines.

There had been reports that Kingfisher was talking to private equity players to offload some stake to raise money.