Kingfisher boss ready to sell beer outfit
MUMBAI, 2 April 2012: Indian liquor baron Vijay Mallya is mulling a plan to give up control of his flagship spirits firm to brewing giant Heineken in a bid to ease his debt-laden airline’s woes, a report said late last week.
The sale of a stake in United Breweries Holdings to the Dutch beer group could bring in much-needed funds to reduce the financial crisis engulfing Kingfisher Airlines, according to the Economic Times newspaper.
While it did not say how big a stake Mallya would sell, the paper said the deal was estimated to be worth 17-25 billion rupees (US$340-$500 million) and would give Heineken, already a major shareholder, control of the spirits firm.
“Talks have begun with Heineken to sell a portion of the stake,” the Economic Times reported, quoting unnamed sources close to Mallya, who heads the United Breweries group, which oversees the spirits firm and Kingfisher.
London’s Financial Times reported that Mallya was looking at selling 13% of his holding.
Heineken currently holds a 37% stake in United Breweries Holdings, and Mallya and group firms hold another 40.7% combined, while the rest is publicly owned.
Heineken beer has been locally brewed and sold in India since last year, after it signed a deal with Mallya to increase its presence in one of the world’s fastest-growing beer markets.
“We will not comment on speculation,” UB group spokesman Prakash Mirpuri said, when contacted by AFP.
Kingfisher Airlines owes millions of dollars to suppliers, lenders and staff and is now running with just 20 aircraft, down from a peak of 64.
The troubled carrier, which earlier this month shut down its overseas operations, is trying to persuade local banks — among its main shareholders — to lend it more money.
Experts have blamed Kingfisher’s difficulties on a string of factors including too rapid expansion, high fuel costs and price wars among carriers.
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