Mallya firm to raise $300 mn to reduce debt
September 10th, 2009 - 9:35 pm ICT by IANSBangalore, Sep 10 (IANS) India’s liquor major United Spirits Ltd will raise about $300 million through private placement by October to reduce its debt burden, its chairman said Thursday.
“We will raise the money through private equity from qualified institutional promoters or by selling a portion of our treasury stock in the domestic market,” United Spirits chairman Vijay Mallya told reporters here.
“We are exploring all the three options. It could be through a combination of PE and QIPs or treasury stock,” Mallya said after the 10th annual general meeting of his flagship company United Breweries Ltd.
Mallya, however, did not specify the debt amount the company had on its balance sheet to acquire the British-based Whyte & Mackay for $1.2 billion in 2007.
Acquisitions of majority stake in Shaw Wallace for $300 million in 2005 and Whyte & Mackay brands made United Spirits the third largest spirits firm in the world.
The decision to raise the funds through institutional investors stems from the company’s aborted talks last month on selling a strategic equity stake to British spirits major Diageo Plc.
The holding firm (United Spirits) had raised about $185 million from the open market in June by selling 10.3 million shares it held in Shaw Wallace to pay back a portion of the debt.
Mallya, who is also chairman of Kingfisher Airlines Ltd, said he was looking at a rights issue followed by a global depositary receipts (GDRs) to infuse fresh capital into the merged entity with Deccan Aviation Ltd.
“We are looking at a rights issue and a GDR issue to raise additional funds to meet our present and future plans, including expanding our international services,” Mallya said but declined to state the amount to be mobilised.
The company’s chief financial officer, Ravi Nedungadi, said the rights issue would be offered by the end of the current fiscal.
Asked about the ongoing pilots’ stir in the rival private carrier Jet Airways, Mallya said it was unfortunate and should be resolved soon.
UB Ltd reported net sales of Rs.16.73 billion (Rs.1,673 crore) and net profit of Rs.630 million (Rs.63 crore) in fiscal 2008-09.
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- Kingfisher airlines to raise Rs.5,000 crore - Aug 31, 2010
- Kingfisher Airlines' board approves Rs.2,000 crore rights issue - Aug 26, 2011
- Tata Steel hopes to save Rs.100 using Dhamra port - Jan 18, 2011
- Unfair to write Kingfisher's epitaph: Mallya (Lead) - Nov 15, 2011
- Leela hotel group to sell 15 percent equity - Mar 07, 2011
- Mallya's liquor firm is world's second largest in sales - Apr 08, 2010
- Godrej Properties to raise Rs.500-600 crore to reduce debt - Feb 10, 2012
- Aban Offshore hopes 10 percent topline growth this fiscal - Sep 24, 2010
- Kingfisher board to chalk out rescue plan - Nov 14, 2011
- Leela Group to issue 14.5 percent preferential shares - Apr 18, 2011
- Shaw Wallace may merge with United Spirits 'shortly' - Dec 29, 2008
Tags: annual general meeting, aviation ltd, carrier jet, debt burden, deccan aviation, diageo plc, equity stake, flagship company, gdr issue, global depositary receipts, institutional investors, jet airways, kingfisher airlines, majority stake, private carrier, private placement, shaw wallace, treasury stock, united breweries ltd, vijay mallya