United Spirits mulls stake sale to Diageo: Aid for Kingfisher? | business | Hindustan Times
Today in New Delhi, India
Aug 24, 2017-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

United Spirits mulls stake sale to Diageo: Aid for Kingfisher?

Vijay Mallya-led liquor firm United Spirits is in talks to sell a stake to UK-based Diageo Plc, the world’s largest distiller and the maker of Johnnie Walker Scotch whisky and Smirnoff vodka. The sale is likely to help Mallya raise funds for debt-ridden Kingfisher Airlines.

business Updated: Sep 25, 2012 22:53 IST
HT Correspondent

Vijay Mallya-led liquor firm United Spirits is in talks to sell a stake to UK-based Diageo Plc, the world’s largest distiller and the maker of Johnnie Walker Scotch whisky and Smirnoff vodka. The sale is likely to help Mallya raise funds for debt-ridden Kingfisher Airlines.

“United Spirits and Diageo Plc confirm that the UK-based company is in discussion with it and United Breweries Holdings in respect of possible transactions to acquire an interest in the liquor firm,” said United Spirits in a filing to the Bombay Stock Exchange. “However, there is no certainty that these discussions will lead to a transaction.”

Mallya has been scrambling for nearly a year to raise funds for Kingfisher, which has a debt of Rs. 7,500 crore, prompting speculation that he may need to offload stakes in United Spirits, the country’s dominant spirits maker, or United Breweries, producer of his flagship Kingfisher beer.

In 2008, the two sides held talks that collapsed, but sources close to the situation said Diageo is hopeful of a deal this time as Mallya is more open to offers.

Diageo is reportedly trying to buy a 15% stake from Vijay Mallya and follow it up with 10% from other shareholders.

Analysts see a deal as positive for Diageo. "Emerging market sales would jump to 45% of Diageo sales from 40% now," said analyst Pablo Zuanic at brokers Liberum Capital.



http://www.hindustantimes.com/Images/popup/2012/9/26-09-biz2.jpg