United Spirits, the Indian drinks giant controlled by flamboyant tycoon Vijay Mallya, may be prepared to sell a 15%-plus stake and give board representation to Diageo in a move aimed at reducing the Bangalore behemoth's debts, it emerged yesterday.
However, both Mallya, often cited as India's version of Richard Branson, and Diageo, the world's largest alcoholic drinks group, insisted there was no certainty a deal would struck over talks that began between the two parties last year.
In recent months, media reports have intensified claiming that Mallya would use the proceeds from the stake sale to reduce debts of around £835m largely from its near-£700m acquisi- tion of Glasgow-based distiller Whyte & Mackay in 2007.
Mallya told an Indian television station while he had intended to offer Diageo a stake of less than 15% using shares that United – listed on the Indian Stock Exchange – had bought back and was holding on its books, he was willing to offer more if Diageo wanted.
He also said that if Diageo wanted board representation then he would not stand in the way.
At the same time, Mallya said United would also push ahead with plans to sell 49% in Whyte & Mackay, which was part of the discussions with Diageo.
l Separately, Pernod Ricard, the world's second-largest drinks company, yesterday stuck to its goal of boosting recurring net profit to more than 1bn in its latest half-year as recession-hit consumers continue to spend on wine and spirits.
The group said Chivas Brothers contributed significantly to the growth and the company “ongoing commitment” to its brands were demonstrated by the “expansion works currently taking place at the Glenlivet Distillery in Speyside”.
The expansion plans, the group said, have been driven by a global increase in demand for Glenlivet, with a volume growth of 7% during the first half of the financial year.
Source: The Herald