United Spirits (USL) has exited India’s largest beer maker United Breweries (UBL), owner of the popular Kingfisher beer brand, by selling its entire 3.21 % stake in the company, reports fe Bureau in Kochi.
United Spirits (USL) has exited India’s largest beer maker United Breweries (UBL), owner of the popular Kingfisher beer brand, by selling its entire 3.21 % stake in the company, reports fe Bureau in Kochi. India’s largest liquor maker USL informed the exchanges that this divestment is a part of the process of monetising certain non-core assets of the company. USL sold its stake to Heineken International at a price consideration of Rs 1,030 per share, the company said in a BSE filing. The company sold 85 lakh equity shares in a block deal to Heineken International. “The sale consideration net of brokerage is Rs 872 crore resulting in profit on this transaction,” a company official added.
USL said that following the completion of this sale, it will “hold no shares in UBL and will cease to be a promoter of United Breweries”. As per BSE data, as on March 31, 2015, Heineken International and Heineken UK together held a 4.81 % stake in UBL.
Diageo holds a 55 % stake in USL but Vijay Mallya continues to remain chairman of the board in disregard to the board asking him to quit. Recently, Mallya, the promoter and chairman of UBL, lost a major part of his voting rights in UBL following Unit Trust of India Investment Advisory Services acquiring his 3.97% voting rights on pledged shares in UBL after a default. Following this development, Mallya’s voting rights in the company remains just 0.06%.
Mallya has been battling a number of cases, including against banks over ‘wilful defaulter’ tag related to loan defaults by the now defunct Kingfisher Airlines. Earlier this year, a 17-bank consortium led by state-run State Bank of India initiated the process of taking over physical possession of the prized Kingfisher House, worth Rs 100 crore. In April, alleging fund diversion of Rs 1,337 crore, the Diageo-owned USL asked Mallya to quit the board.
USL has been battling margin erosion despite leading in market share with loss for the last fiscal standing at Rs 1,956.48 crore against a net loss of Rs 5,102.82 crore in FY14.The USL scrip moved up 2% to close at Rs 3,499.55 on Tuesday. UBL closed at Rs 1,014.10 on the BSE on Tuesday, down 1.08 % from its previous close.