The country’s largest spirits maker, United Spirits (USL), is taking steps to sell 13 properties owned earlier by the beleaguered liquor baron Vijay Mallya, as its former chairman failed to buy back those assets within a given time frame. USL in a regulatory filing to stock exchanges said that the period of this option has expired with Mallya or his nominee not purchasing any of the non-core properties.
When Mallya resigned as chairman of USL following a $75-million deal with the company’s new owner Diageo, in February 2016, the liquor baron had entered into a pact that allowed him or a party nominated by him to acquire up to 13 domestic properties from United Spirits within a limited time span. The 13 properties to be sold by USL, were historically used or occupied by Vijay Mallya.
The company now intends to divest these non-core assets at market value through a transparent process, under the overall supervision and direction of the concerned board committee. The company did not specifically mention the identity of the properties which will be put on the block.
USL, however, said that though it received call notices from a party nominated by Mallya indicating interest to purchase four of the properties, the notices have since expired due to the party’s inaction. The company further disclosed that it had obtained independent valuation of the properties and shared the same with Mallya, which was historically used or occupied by him.
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Under the 2016 agreement, if Mallya or his nominee choose to acquire any or all of these 13 properties, the prices would have been based on an independent valuer’s assessment fair market value, with a 10% discount for three properties in Mumbai, Goa and New Delhi.
Mallya, the ex-boss of grounded Kingfisher Airlines, owes close to Rs 9,000 crore to various banks, and is currently wanted in India. He has been living in Britain since March last year and India is in the process of getting him extradicted him.
USL, the Diageo’s business in India, is the largest beverage alcohol company in the country with McDowell’s No 1 being one of the largest consumer brands. The company has a brand portfolio with over 100 brands of which 15 brands sell over 1 million cases, according to an investor presentation by USL in May this year.