ED plans to sell chunk of Mallya's UB shares to raise Rs4,000 cr

The Enforcement Directorate (ED) is planning to sell a major part of Vijay Mallya's unpledged shares in United Breweries to raise more than Rs4,000 crore, which is almost half of what the former liquor baron owes to lenders to his defunct Kingfisher Airlines, The Economic Times reported.

Unnamed officials told the paper that the ED has got hold of 4 crore unpledged shares, which constitutes to around 15.2 per cent stake, owned by Mallya in a beer company. The shares have been transferred to the ED by the Stock Holding Corporation of India under the Prevention of Money Laundering Act (PMLA), the sources said. The remaining 27 lakh crore shares will soon be transferred.

Mallya did not respond to emailed questions.

The shares will be sold under Section 9 of the PMLA. The Act says that after an order of confiscation, all the rights and titles in such assets stay with the Centre.

The estimated amount expected to be garnered by the sale of the shares is Rs4,327 crore, going by Thursday's closing price which stood at Rs1,081.85.

As of now, Mallya owns 29.46 per cent in United Breweries which comes to around 7.79 crore shares. Out of these, 3.52 crore shares constituting 45.17 per cent of his stake is pledged with lenders.

Dutch brewer Heineken International owns 43 per cent in UB and the rest is held by the public.

Heineken, which had purchased shares from the lenders in 2016, is keen to hike its stake and ED's move provides it with an opportunity. UB's Articles of Association bar Heineken from buying shares from the market unless it is a bilateral deal.

"Heineken can go through the only possible route to strengthen its holding in UBL by offering the best market price," an official close to UB told ET. "Given the situation, Mallya himself may not want any business interests in a country where he runs the risk of getting arrested. Then there is this complicated shareholder agreement between Mallya and Heineken in UB."

A Heineken spokesperson did not respond to ET's queries.

Mallya resigned from the UB board after the Securities and Exchange Board of India barred wilful defaulters from the board of Indian companies.