The United Breweries Group is selling up to 14.9 per cent of its 17 per cent stake in United Spirits Ltd (USL) to global liquor major Diageo.
A high-level UB team led by group chairman Vijay Mallya, group CFO Ravi Nedungadi, USL president and managing director Vijay Rekhi and USL CFO P A Murali is expected to conclude sale talks with Diageo in New York tomorrow.
United Breweries (Holdings) Ltd had pledged about 30 million shares in United Spirits as security for loans taken for the acquisition of Whyte & Mackay and Mallya plans to deleverage the group stake in USL to repay the loan.
"I don't have any shares in United Spirits, the shares are via UB (Holdings) Ltd - about 30 million shares are pledged as disclosed in our accounts," NDTV Profit quoted Mallya as saying.
Diageo was not certain that the talks would lead to a transaction but said it was reviewing plans for a possible collaboration with United Spirits.
Mallya also said while talks with Diageo was progressing, there were also others interested in acquiring a stake in USL. Foreign liquor majors see a stake in an Indian liquor company as strategic to product marketing in India.
Shares of USL, which were trading at Rs1,800 when Diageo approached UB for a stake, has come down to around Rs430.80 now.
Mallya said USL's value in the stock market does not reflect the intrinsic strength of the company but investors understand and realise it. The market share of USL has not come down. The company has a robust growth at 18 per cent, he said
United Spirits sells spirits under the brand names such as McDowell's No 1, Royal Challenge and Antiquity.