Mallya to buy 35 per cent of Balaji Distilleries

The group is expected to place an offer of Rs 96.49 crore for 35 per cent equity in the company, reports Indulal PM & MC Vaijayanti.

The UB Group, controlled by liquor baron Vijay Mallya, is understood to be in the final stages of negotiations with the Chennai-based Balaji Distillery for a potential buyout.

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According to sources, UB has completed the due diligence process and a final bid is expected to be submitted soon. The group is expected to place an offer of Rs 96.49 crore for 35 per cent equity in the company, valuing Balaji at Rs 275 crore.

Balaji Distilleries is engaged in the manufacture of Indian Made Foreign Liquor (IMFL) products from rectified spirit. During the last financial year, the total income of the company stood at Rs 445 crore, while it registered a net loss of Rs 11.79 core.

According to sources in financial institutions, IDBI and IFCI have agreed for a one-time settlement of Balaji’s outstanding dues. The financial institutions will get equity shares of the company as part of the settlement.

When contacted a UB Group spokesperson said, "The distillery has already been leased to the UB Group. So there is no question of acquisition." Balaji Distilleries CFO S Nagarajan did not respond to repeated phone calls.

The UB Group has a tie-up with Balaji Distilleries and the brewing business has already been leased to the company. It has an ongoing contract manufacturing arrangement with the brewery for most of its major brands.