USL shares down 2% as co seeks shareholders nod to report sick

United Spirits shares fell by 2 per cent today as the company is seeking approval from its shareholders to report sick to BIFR after its accumulated losses as on March 31, touched 86 per cent of peak net worth during the last four financial years.
The stock fell by 2.08 per cent to settle at Rs 2,920.30 on BSE. During the day, it dipped 3 per cent to Rs 2,890.05.
At NSE, shares of the company lost 1.95 per cent to Rs 2,924.60.
The company's market valuation fell by Rs 902.94 crore to Rs 42,440.06 crore.
As per the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), if the accumulated losses of a company, at the end of any financial year have resulted in erosion of 50 per cent or more of its peak net worth during the preceding four financial years, such firm is required to report to the Board for Industrial and Financial Reconstruction (BIFR).

In a notice to the shareholders for an EGM on January 22, United Spirits yesterday said, as per the audited annual accounts for the fiscal ended March 31, "the accumulated losses of the company as at March 31, 2015 is 86 per cent of its peak net worth during the four financial years preceding the financial year ended March 31, 2015".
"Accordingly, this extraordinary general meeting (EGM) is being convened to consider and approve the enclosed report of the Board of Directors on such erosion and its causes, and the measures being taken as per the relevant provisions of SICA, and also to approve the reporting of such erosion to BIFR in terms of Section 23 of SICA," it added.

The company said its accumulated losses as on March 31, at Rs 5,045.45 crore is greater than 50 per cent of the peak net worth in the immediately preceding four financial years at Rs 5,849.62 crore.