Mcdowell Eyes Overseas Listing

Announcing this to shareholders at the company's annual general meeting, Vijay Mallya, chairman, McDowell, said, "We have appointed international accounting firm Deloitte Haskins and Sells to advice us on the US Generally Accepted Accounting Practices to enable an overseas listing."

The consolidation of the spirits business will involve the amalgamation of McDowell & Co Ltd with McDowell Spirits Ltd, a special purpose vehicle created to facilitate the process. The new company will be called McDowell & Co, having its registered office in Bangalore.

The merged entity will control three wholly owned subsidiaries -- Vitari Distilleries, Bhopal, Udaipur Distillery Company, Rajasthan, besides Mysore Wine Products, Bangalore, and Serampore Distillery and Chemical Company, Calcutta.

 

International audit and accounting firm PricewaterhouseCoopers was roped in by the company to work out the process of amalgamation.

"The merger will achieve synergies in production, bottling and distribution of spirits, obtain economies of scale and eliminate unnecessary costs," Mallya said.

In terms of the net impact, the amalgamation will result in a Rs 70-crore increase in turnover annually and a Rs 7-crore jump in EBIT, Mallya said. There will also be a capacity enhancement of 23 lakh cases per annum.

For the year ended March 2000, McDowell achieved a turnover of Rs 1,091 crore and a net profit of Rs 24.59 crore.

The company has clocked a turnover of Rs 253.2 crore for the quarter ended June 2000 as against Rs 244.35 crore in the corresponding period of the previous year. Net profit for the period was Rs 6.22 crore as against Rs 5.45 crore in June 1999.

On the company's strategy with regard to competition from imported brands, Vijay K Rekhi, managing director of the company, said, "McDowell Lifestyle Brands, a subsidiary of McDowell & Co, has been set up to make available imported brands in India."

The company will be tying up with a host of international names to market and distribute their brands in the country, he said.