Heineken increases stake in United Breweries to 43%

Mallya holds 32.45% in United Breweries, nearly half of which is pledged with banks as his personal surety for loans taken to run the defunct Kingfisher Airlines

Dutch beer maker Heineken increased its stake in United Breweries to 43 per cent by buying shares in the open market even as UB chairman Vijay Mallya battles an outrage for loans he owes to banks. Mallya holds 32.45 per cent in United Breweries, nearly half of which is pledged with banks as his personal surety for loans taken to run the defunct Kingfisher Airlines.

Heineken bought 21.15 lakh shares for Rs 179 crore to increase its stake in UB by 0.8 per cent. Yes Bank and ECL Finance, with whom Mallya had pledged shares, sold them in bulk deals on Wednesday, according to the BSE. Mallya, who built India's largest beer and liquor company, lost majority control after he started the cash guzzling Kingfisher Airlines that virtually brought down his empire. Mallya lost majority control in United Breweries to Heineken, in which he still has significant stake and United Spirits to British liquor major Diageo, from which he was forced to exit.

In the bargain, Mallya got $ 75 million from Diageo with a commitment not to compete with United Spirits and Diageo globally.

"Heineken can confirm that it has acquired in total 2.115.088 UBL shares. We acquired 600.000 UBL shares from YES Bank for Rs 847 per share, 852.548 UBL shares from ECL Finance for Rs 845 per share and an additional 662.540 UBL shares from ECL Finance for Rs 847 per, respectively. This represents 0.8% of UBL’s share capital. The transaction increases Heineken’s stake in UBL from 42.2% to 43%. The total price was ca. EUR 24 million. It does not result in any changes to the UBL governance structure. Heineken continues to be positive about the prospects of the business in India. India has highly favourable demographics with strong economic fundamentals so the market remains an exciting opportunity for continued growth," Heineken  said.