World's largest spirits maker Diageo Plc may not be able to fully acquire the proposed 27.40 per cent stake in United Spirits Ltd (USL) ahead of the November 11 deadline with IDBI Bank refusing to release pledged shares.
In a filing to BSE, Relay B V, a wholly-owned subsidiary of Diageo Plc, said acquisition of 2.38 per cent from USL Benefit Trust is yet to be completed.
The 34.59 lakh equity shares had been been pledged in favour of Unit Trust of India Investment Advisory Services (security trustee) acting on behalf of Punjab National Bank (PNB) and IDBI Bank.
"After repayment of loan, PNB has issued no objection to the security trustee to release the pledge over remaining sale shares. However, IDBI Bank despite repayment and repeated requests has refused to instruct the security trustee to release the pledge over remaining sale shares," it said.
"..In the light of the reasons described above, we do not expect to be able to complete the acquisition of remaining sale shares within the prescribed period, ie November 11, 2013," Relay B V said.
United Spirits has filed a write petition against IDBI and security trustee in Karnataka High Court on November 6 seeking seeking relief, it added.
Comments from IDBI could not be obtained.
"Our current shareholding in USL is 25.02 per cent," it added.
Earlier this year, Diageo Plc had completed the acquisition of 25.02 per cent stake in USL on completion of a share purchase deal announced last year.
Last year, Diageo had announced that it would pick up 53.4 per cent stake in USL in a multi-structured deal for a total of Rs 11,166.5 crore.
Instead, it could pick only 25.02 per cent stake in USL for a total consideration of Rs 5,235.85 crore due to subdued response to its open offer to public shareholders.
Diageo sells various popular brands, including Smirnoff Vodka and Johnnie Walker whiskey. USL, which is India's top spirits maker, markets various liquor brands, including Signature, Bagpiper, Antiquity, Royal Challenge in the country.