United Spirits drop as minority shareholders reject nine proposals at EGM

United Spirits lost 1.2% to Rs 2,700 at 10:56 IST on BSE after the minority shareholders of the firm rejected as many as 9 of 12 resolutions, including some pertaining to pacts with entities connected to erstwhile promoter Vijay Mallya.

The announcement was made on Saturday, 29 November 2014.

Meanwhile, the S&P BSE Sensex was up 59.28 points or 0.21% at 28,753.27.

On BSE, so far 6,271 shares were traded in the counter as against average daily volume of 35,134 shares in the past one quarter.

The stock hit a high of Rs 2,750 and a low of Rs 2,501 so far during the day. The stock had hit a record high of Rs 2,940.55 on 15 April 2014. The stock had hit a 52-week low of Rs 2,226 on 5 September 2014.

The stock had underperformed the market over the past one month till 28 November 2014, advancing 2.09% compared with the Sensex's 6.75% rise. The stock had, however, outperformed the market in past one quarter, jumping 13.93% as against Sensex's 7.72% rise.

The large-cap firm has equity capital of Rs 145.33 crore. Face value per share is Rs 10.

United Spirits (USL)'s shareholders at its EGM held on Friday, 28 November 2014, rejected as many as 9 of 12 resolutions, including some pertaining to pacts with entities connected to erstwhile promoter Vijay Mallya.

Shareholders rejected the approval to a loan agreement dated 3 July 2013 between USL and United Breweries (Holdings) (UBHL). They also did not approve pacts dated 30 September 2011 and 22 December 2011 between USL and UBHL that required UBHL to sell to the firm certain immovable properties. Other resolutions that were defeated with requisite majority include approval of a services agreement dated 3 July 2013 between USL and Kingfisher Finvest India, approval of a sponsorship pact dated 11 June 2013 between USL and United Racing & Bloodstock Breeders, approval of a sponsorship pact dated 11 June 2013 between USL and United Mohun Bagan Football Team, approval of properties call agreement dated 11 June 2013 between the company and PE Data Centre Resources, and approval of contribution agreement dated 11 June 2013 between the company and Vittal Mallya Scientific Research Foundation.

The three resolutions that were passed related to erosion of net-worth of the company, sales promotion agreement dated 1 October 2013 and trademark licence pact dated 29 June 2013 between the company and UBHL.

According to a filing to BSE, USL's promoters were prohibited from voting on the resolutions. These included, Relay BV, which owns 54.78%, United Breweries Holdings, Kingfisher Finvest India among others.

United Spirits reported a net loss of Rs 27.83 crore in Q2 September 2014 compared with net profit of Rs 94.27 crore in Q2 September 2013. Net sales rose 8.1% to Rs 2156.54 crore in Q2 September 2014 over Q2 September 2013.

United Spirits produces alcohol beverages. The company is now controlled by world's largest spirits maker Diageo, which had acquired an additional 26% shares in USL for Rs 11448.91 crore in July 2014.

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