Can billionaire Vijay Mallya divest his shareholding in United Spirits Ltd (USL) when it has already been given as top-up security — pledged as secondary collateral — to lenders?
A very senior banker, who did not wish to be named ,said he can — provided he adjusts his current liabilities or offers an “acceptable” alternative security to the bank.
“In my view, he can release his pledged shares for divestment in one of the two ways. Essentially, he will have to get the approval of the lenders before he takes any decision on the pledged shares,” said the banker.
Also, since the value of pledged shares has crashed dramatically since it was offered as collateral to the bank, Mallya will have to top off the margin too, meaning make good the difference by providing additional cash.
An analyst said these things would influence the value or terms of any deal that Mallya enters into with a prospective buyer of his stake.
Mallya would be meeting officials of Diageo Plc, the drinks giant, in New York for a discussion on USL stake sale.
Mallya owns stake in his spirits company through United Breweries Holdings Ltd and is looking to offload part of his shares to raise cash for his company.
“Mallya is in New York today and will be meeting the relevant people (Diageo) tomorrow,” Vijay Reiki, president and managing director of USL told DNA Money on Tuesday.
The liquor baron is reportedly open to selling up to 14.9% of a total 17% of the treasury stock to a strategic investor.
Speaking to a TV channel, Mallya said, “I have had serious expressions of interest from multiple strategic investors when the stock was trading at Rs 1,800. The company is very strong, USL has increased its sales volumes by 10 million or 1 crore cases in the 9 month s of this fiscal year, so that’s a world record in itself, no other company has achieved it.”
The flamboyant owner of the liquor group also confirmed he would divest part stake in Whyte & Mackay soon. He denied that the group’s loans were being restructured by lenders.
