Mallya comfy selling anything

Liquor baron Vijay Mallya, who is desperately seeking funds to reduce debts of United Spirits Ltd (USL), said on Thursday that he was “comfortable” offloading any level of stake provided it was lower than his own holding.

Mallya is currently in discussions with drinks giant Diageo Plc and other strategic investors for a stake sale. He had earlier expressed his intention to divest only up to 14.9% stake.

Mallya is looking at selling close to 15% of the treasury stock which is held through a trust.
 
Currently, United Spirits has 17.2% of treasury stock.

An informed source, on the condition of anonymity, said sale of anything above 14.9% would involve a combination of treasury stocks and other holdings in the company.

The source said Mallya did not want to dilute his stake in the company, which currently stands at 35%.

USL’s share price has taken a severe beating since Mallya initiated talks with Diageo and other prospective buyers.

On Thursday, it was down to Rs 567 per share from Rs 1,800 per share.

Sources said Diageo was looking at a price of Rs 1,000 per share, while Mallya was quoting Rs 1,300-1,500.

At Diageo’s price, if Mallya were to offload a stake equal to the promoter  group’s,  he would be able to raise Rs over 3,500 crore ($730 million).

That would take care of half of United Spirits’ debt, which is close Rs 7,000 crore.

According to the shareholding pattern of the company published on the Bombay Stock Exchange website, the promoter and promoter group held 36.57% as on December 31, 2008.

Indian and foreign institutional investors’ stake was at 38.1%, and non-institutional and individual holding at 25.28%.