Indian liquor tycoon, Vijay Mallya has got some respite from mounting debt woos as London-based Diageo Plc recently agreed to buy a majority stake in United Spirits Ltd (USL) for a total consideration of Rs 11,166.5 crore gaining a strong presence in the Indian market.
Diageo, the maker of Johnnie Walker Scotch whisky and Smirnoff vodka, will acquire some 53.4 per cent of USL, the producer of Royal Challenge and McDowell’s No. 1 whiskies and Romanov vodka.
Mallya will continue as chairman of USL and United Breweries Holdings, and he will work with Diageo to build the USL business.
Mallya’s United Breweries Holdings Ltd will be left with a shareholding in USL amounting to 14.9 per cent of the current share capital. The sale will help Mallya reduce debt at his UB Group of companies that had amounted to Rs 22,999.11 crore as on March 31 this year.
As for the ailing Kingfisher Airlines Ltd, which has been grounded by the aviation regulator and has USD 2.5 billion of liabilities, Mallya said it would be “unfair for me to comment now what this deal means to Kingfisher. I am doing what is best for my businesses. I believe that I have done what is best for my spirits business. I will be doing what is best for Kingfisher Airlines separately, and I would be doing (it) fairly and squarely.”
Paul S Walsh, CEO, Diageo, said, “We will be well positioned to take the growth opportunities presented by a spirits market where growth is driven by the increasing number of middle-class consumers.”