The UB group, which owns Kingfisher Airlines, has started discussions with banks to possibly avert the impending liquidation of mortgaged assets or minimise the impact of lenders’ move to recall loan given to the airline.

“We have received no formal communication from the banks till date. We are in continuing discussions with them on ways to bring down their exposure, inter alia, from the proceeds of the Diageo transaction,” the UB group says in a statement.

“The banks explicitly support the transaction with Diageo, and would work with us in finding an orderly method of disposal of some of the pledged shares to Diageo if appropriate,” the statement adds.

On Tuesday, a consortium of 17 lenders, led by State Bank of India (SBI), considered recalling the Rs.7,000 crore loan advanced to Kingfisher as the airline’s promoters could not come out with any credible plan for revival.

With the Kingfisher Airlines brand (valued by Grant Thornton for Rs.4,100 crore), which has been mortgaged with the banks, unlikely to yield any value, the banks are pinning their hopes on the hypothecated shares of UB group companies, namely, United Spirits and United Breweries Holdings to recover as much as possible.

Analysts are divided whether the banks will resort to offloading the pledged shares in the open market affecting the Diageo deal.