Diageo-controlled United Spirits Ltd has sold its entire 3.21 per cent stake in beer maker United Breweries Ltd to Dutch brewer Heineken for Rs 872 crore ($137 million), it said on Tuesday.
United Breweries houses a clutch of brands besides the flagship Kingfisher including Kalyani Black Label, Zingaro, Guru and Bullet.
Heineken, the world's third-largest brewer and the single-largest shareholder of the firm, now gets a larger play in the company known for making India's top beer brand Kingfisher with a holding of 42.06 per cent.
VCCircle had first reported on April 8, an impending move by Dutch brewer to hike its stake in United Breweries.
UB Group president and CFO AK Ravi Nedungadi had said back then that there has not been any communication from Heineken on such a move.
Liquor king Mallya, who burnt his finger with a costly attempt to fly with now bankrupt Kingfisher Airlines and an ambitious overseas acquisition spree through United Spirits, still owns close to a third of United Breweries.
Mallya along with various group companies own 32.77 per cent (of which close to half of the stake is pledged with financial institutions).
United Spirits, now controlled by Diageo but still co-promoted by Mallya as a minority partner, said it sold the entire stake as part of divestment of non-core asset and need no longer be counted as a co-promoter of United Breweries.
United Spirits' scrip rose 2 per cent to close at Rs 3.499.55 a share on BSE in a flat Mumbai market on Tuesday.
Heineken raising its holding to get a majority stake in United Breweries has been a possibility all this while as Mallya lost control of his crown jewels over debt pile-up in various group firms. Also, Mallya had to rope in Saroj Poddar as a white knight to help retain control of Mangalore Chemicals & Fertilizers Ltd after Deepak Fertilisers mounted a hostile bid.
He was even categorised a wilful defaulter by a few banks which forced him to relinquish the post of chairman and board membership of Mangalore Chemicals.
He is currently locked in a boardroom battle with Diageo over some alleged irregularities on loans made by United Spirits to UB Group firms.
Earlier, United Breweries had redeemed 7.4 million cumulative redeemable preference shares held by Heineken, which was due to mature on March 31, 2015. The company had raised this quasi debt during 2006.
United Breweries' scrip declined 1 per cent to end the day at Rs 1,014.1 a share on BSE.