By IANS,
Bangalore : 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.