Companies & Sectors
Open offer for United Spirits postponed; awaits final SEBI nod

The proposed open offer for an additional 26% stake in United Spirits entails Diageo to purchase about 3.8 crore shares at Rs1,440 per share

Mumbai: The open offer for buying 26% in Vijay Mallya-led United Spirits, which was to start on Monday, has been postponed, pending final approval from market regulator Securities and Exchange Board of India (SEBI), reports PTI.

 

JM Financial, the manager for the open offer, has said that since the "final observations from SEBI" are awaited, the schedule has been revised.

 

"... The revised schedule of activities will be intimated in due course," according to a filing made by United Spirits to the BSE.

 

Global liquor major Diageo Plc is to acquire 26% shareholding in United Spirits through the open offer worth Rs5,441 crore, as part of a deal to buy up to 53.4% stake in the company.

 

As per the detailed public statement (DPS) issued in November last year, the open offer was to start on 7th January.

 

Shares of United Spirits declined 1.12% to close at Rs1,915.25 on the BSE.

 

As per the transaction, announced on 9th November, Diageo is acquiring a 27.4% stake in USL, through a combination of purchase of shares from existing promoters and a preferential allotment of share, for Rs5,725.4 crore.

 

Any acquisition of 25% or more stake in a listed company triggers a mandatory open offer for purchase of additional 26% stake from the public shareholders and the same needs to be cleared by the market regulator.

 

The proposed open offer for an additional 26% stake in United Spirits entails purchase of about 3.8 crore shares at a price of Rs1,440 per share, totalling to Rs5,441 crore.

 

United Spirits, the country's largest spirits company, is part of Vijay Mallya-led UB Group, whose aviation venture Kingfisher Airlines has been going through turbulent times for many months now.

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RBI relaxes ECB norms for infrastructure finance companies

RBI has enhanced the ECB limit for NBFC-IFCs under the automatic route to 75% of their owned funds, including the outstanding ECBs, from 50% of their owned funds

Mumbai: Relaxing the external commercial borrowings (ECBs) norms, the Reserve Bank of India (RBI) said non-banking financial companies (NBFCs) operating as infrastructure finance companies (IFCs) can now avail the overseas borrowings up to 75% of their owned funds without its approval, reports PTI.

 

"On a review, it has been decided to enhance the ECB limit for NBFC-IFCs under the automatic route from 50% of their owned funds to 75% of their owned funds, including the outstanding ECBs," the RBI said.

 

However, NBFC-IFCs desirous of availing ECBs beyond 75% of their owned funds would require the approval of the RBI and will, therefore, be considered under the approval route.

 

The RBI move is expected to help such infrastructure finance companies to raise overseas funds at attractive rates.

 

The Planning Commission envisages the need for investment of $1 trillion to build the country's infrastructure during the Five Year Plan which began this fiscal.

 

The Commission expects half of the funds to come from the private sector.

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Bankers to decide future course of action on Kingfisher soon

The next meeting will be held in Mumbai soon where lenders are likely to push for better commitment from the Vijay Mallya-owned Kingfisher Airlines

New Delhi: Lenders of Kingfisher Airlines will soon decide on future course of action with regard to the grounded carrier as they do not want the company to close down, reports PTI quoting top official from State Bank of India (SBI).

 

"The representatives met in Bangalore ... the plan for action the consortium is deciding. We don't want to put a lock on the company's office," Pratip Chaudhuri, chairman of SBI, lead lender to Kingfisher, said.

 

Last week, the meeting between lenders and the Kingfisher management remained inconclusive as bankers were "not impressed" with the revival plan, sources said.

 

The next meeting will be held in Mumbai soon where lenders are likely to push for better commitment from Kingfisher Airlines (KFA), sources added.

 

The 17-bank consortium has extended Rs7,000 crore loans to Kingfisher. SBI alone has an exposure of Rs1,500 crore, which has not been serviced since January, 2012.

 

As per the revival plan submitted to Directorate General of Civil Aviation (DGCA) last month, Kingfisher had said it would require about Rs652 crore over the next 12 months for running its operations. These funds would come from the UB Group's resources as banks were unwilling to fund the cash-strapped airline.

 

Of the Rs652 crore that the airline would need to restart operations, Rs120 crore would be needed to meet salary arrears for its employees.

 

Kingfisher Airlines CEO is understood to have informed DGCA that the salary dues would be cleared by giving two months' wages and back wages each month from the next month onwards.

 

In addition, funds would be required to refurbish the aircraft, including their engines. The airline's pilots would also have to undergo refresher training and medical tests before they can start operating flights again.

 

Kingfisher officials claimed that there were no dues against oil companies, barring interest payments due to HPCL.

 

The airline would have to meet the dues it owe to airport operators, including the Airports Authority of India (AAI) to which it has an outstanding of over Rs250 crore.

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