India: United Breweries share sale by ED provides Heineken with opportunity to increase stake in the brewer

The Enforcement Directorate (ED) is all set to sell a large chunk of unpledged shares owned by Vijay Mallya in United Breweries, to raise more than Rs 4,000 crore, or nearly half of the money owed by the liquor baron to lenders, The Times Now reported on January 19.

ED has secured custody of 4 crore unpledged shares, constituting about 15.2 per cent stake, owned by beleaguered tycoon Vijay Mallya in UBL.

The shares were transferred to ED by the Stock Holding Corporation of India under the Prevention of Money Laundering Act (PMLA), reports the Economic Times citing two people with knowledge of the plan. The remaining 27 lakh shares are expected to be transferred soon. Mallya did not respond to emailed questions.

Vijay Mallya owns 29.46 per cent in UBL comprising 7.79 crore shares, out of which 3.52 crore constituting 45.17 per cent of his stake is pledged with lenders.

At present, Dutch brewer Heineken owns 43 per cent share in UBL and is keen to hike its stake further. This share sale by ED provides it with an opportunity.

This is not the first time such a sale is happening under provisions of the money laundering law. ED sold some investments of Ramalinga Raju, the founder chairman of erstwhile Satyam Computers, in Gland Pharma.

"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."

18 January, 2018