India: Vijay Mallya may offer his stake in United Breweries to Heineken to achieve settlement with lenders of Kingfisher Airlines

Troubled tycoon Vijay Mallya may offer his shares in United Breweries (UBL) to partner and Dutch beer giant Heineken to generate cash for a possible settlement with lenders of the defunct Kingfisher Airlines, the Times of India reported on March 31.

If the lenders respond positively, the latest development offers Heineken a clear opportunity to gain controlling ownership of UBL, the largest domestic brewer and the last big Indian company which Mallya helms.

Mallya's counsel made an offer before the Supreme Court to pay Rs 4,000 crore to settle with a consortium of banks fighting to recover unpaid loans. The proposal rests heavily on his ability to divest shares in UBL, in which Heineken owns nearly 44% while Mallya's holding is slightly above 32%.

"This offer will be met from two sources — shares in UBL and a residual stake in United Spirits. Mallya will have to offer shares to Heineken as the latter has pre-emptive rights on them," said a source close to Mallya on condition of anonymity.

The Supreme Court, depending on the response from the banks, will have to lift a lower court freeze on Mallya and his Indian investment company UB Holdings selling assets, the source added.

01 April, 2016