The one known for his sumptuousness seems to have come to a level below that he was on previously. The recent news of Vijay Mallaya having lost the major shares of his luxury brand Kingfisher to the renowned international brand Heineken has shocked many. The United Spirits (USL) exited all non-core investments in United Breweries and sold 85 lakh shares to Heineken, which will now give it leverage to managing affairs of India’s largest beer producer.
USL sold 3.21% shares for Rs 872 crore in a block trade. The shares were sold at Rs 1,030 apiece, a slight premium to Tuesday’s closing price of Rs 1,014.10.
Now, the Heineken’s stake in United Breweries (UB) has increased from 39% to 42.1%. This deal will give Heineken an upper hand over Vijay Mallya in running the company.
Rumours prevailed that the firm was afraid it will lose its rights over these shares if lenders attach these as part of their legal dispute with Mallya over unpaid dues relating to the Kingfisher Airlines bankruptcy.
However, Mallya is not in any danger of losing control of his firm as he will continue to hold 37.5% and the two partners will have the same shareholder rights.
But Heineken could dictate company’s business plan as it has higher shareholding. The exit came after Diageo had asked Mallya to quit as chairman of USL revelations of fund diversion when the company was under his control.
But Mallya has refused to do so, saying that Diageo took over the company after a thorough due diligence and that it was aware of all facts pertaining to the company’s financials.
“It clearly shows that United Spirits is going quick on sale of non-core assets. The next target is going to be the IPL cricket team. The company can raise up to Rs 2,000-2,500 crore in the next two years,” as told by Abneesh Roy, an analyst at Edelweiss Securities.