In one of the biggest stake sales by a domestic firm to a foreign company, UK-based Diageo Plc will buy a 53.4 per cent stake in Vijay Mallya-led United Spirits Ltd (USL) for Rs 11,166.5 crore in a multi-structured deal.
The development comes at a time when Mallya is trying to overcome financial problems in his grounded Kingfisher Airlines.
"This is not a sellout; it's my appreciation of needs... I have recognised the consolidation needs (of Diageo) and wholeheartedly appreciate it... I have not sold any family jewel but embellished it," Mallya said after announcing the deal.
Mallya stressed that the money received from Diageo will not be used to bail out the beleaguered airline.
FULL COVERAGE: Kingfisher crisis
Following the completion of the stake acquisition, which took six years to materialise, India will become the second-largest market for Diageo after the US.
Diageo Chief Operating Officer Ivan M. Menezes said: "India will become Diageo's second-biggest market after the US. India has the potential to become the largest market in the long term."
On initial receivables, Mallya said USL will get Rs 3,300 crore while Rs 2,400 crore will go to UBHL's account. When asked about the debt position, he said: "At present, USL has a debt of about Rs 8,300 crore. The money, which will come into USL, will primarily be used to reduce debt."
ALSO READ: Kingfisher Airlines loss widens to Rs 754 cr
Following completion of these agreements, Mallya will continue in his current role as chairman of USL and UBHL and will work with Diageo to build the USL business as the current consumer trends for premiumisation grow in India.
Shares of United Spirits closed Friday's trade 1.22 per cent higher on the Bombay Stock Exchange at Rs 1,359.70.
Some of the major inbound deals in the past - wherein a foreign company or its subsidiary had acquired an Indian entity - include BP's $9 billion acquisition of Reliance Industries' oil & gas assets and the acquisition of Cairn India by NRI billionaire Anil Agarwal led-Vedanta Resources for over $8 billion.
Will Diageo's Rs 11000 crore deal with Mallya save Kingfisher? NDTV Vijay Mallya has struck a Rs 11,000 crore deal with the world's largest spirits group, Diageo, which will now have a controlling stake of 53.4 per cent in Mr Mallya's crown jewel United Spirits. The big question: how much cash will Mr Mallya now divert ... See all stories on this topic » | ||
No Timeframe Set for Kingfisher's Revival Plan: DGCA INDOlink "They (Kingfisher) said they will submit the revival plan. There is no timeframe for that. Whenever they are ready they can come. We have not got any indication from them when they are going to come to us," Mishra said on the sidelines of ACI Asia ... See all stories on this topic » | ||
Diageo deal not yet plus for Kingfisher Indian Express The Diageo deal could bring nearly Rs 2,400 crore to the balance sheet of United Breweries Holding Ltd (UBHL), but it is unlikely to impact the revival plan for the group's cash-starved KingfisherAirlines, sources said. “The board of UBHL will decide ... See all stories on this topic » | ||
| ||
Birds rescued, activists complain of habitat loss Times of India COIMBATORE: The corporation zoo got some new inmates after some residents rescued a Black Kite, which was unable to fly, from a playground and a White-throated Kingfisher, which was being chased by a cat, from the city on Saturday and handed them ... See all stories on this topic » | ||
Deadline looming for Kingfisher entries ECB.co.uk Clubs wanting to enter next year's Kingfisher Beer Cup must register before the November 23 or risk missing out. Entry is limited to 256 teams from around the country and the winners will take home £5,000 with prizes for all teams that reach the last ... See all stories on this topic » | ||
| ||
Redditch Lions prepare for annual Children in Need collection Redditch Advertiser The club collected in the town centre - the Kingfisher Centre was yet to be completed - and donations were put towards the BBC's aim of raising £1 million. Several club members in typical Lions style, rushed off to Pebble Mills Studios with a massive ... See all stories on this topic » |
No comments:
Post a Comment
Note: only a member of this blog may post a comment.