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September, 2006 Pragati Maidan, New Delhi, India |
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In high `spirits`.
Scottish `N` Castle picks up 37.5% in UB.
UK based beer major Scottish and Newcastle (S&N) according to which S&L will pick up 37.5% stake in UBL. The whole offer works out to a figure of Rs. 9.4 billion.
Mallya and his associate companies will hold identical shares of 37.5% and S&N will receive 17,5% of UBL’s equity by means of preferential allotment for a sum of Rs. 2.2 billion. S&N will also invest in UBL by way of non- convertible redeemable preference shares with a coupon rate of 3%.
Following this S&N will make an open offer to acquire up to 20% of the equity of UBL at Rs. 575 a share. Also under the deal the operations of MABL (Millennium Alcobev Ltd), a company in which S&N has already invested will be combined with UBL.
The deal provides for Mallya to reamin chairman and bestows the right to nominate UBL’s CEO while S&N will have the right to nominate the CFO. There will also be two nominees each from both the companies on the UBL board. S&N will continue it Rs. 500 million guarantee for UBL’s proposed external commercial borrowings (ESB) issue.
With this arrangement UBL’s market share in India’s beer market will rise up to 50% said a very optimistic Mallya and the stock market seems to agree. The stock of UBL closed at a all time high of Rs. 501.95 on December 17th from 397.40 on December 1st .
Date: 20-Dec-2004
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