Diageo-controlled United Spirits Ltd (USL), India's largest liquor maker, has agreed to sell its French winery Bouvet Ladubay SA as part of a plan to divest non-core assets.
It didn't, however, disclose any financial details or the buyer's name. The deal is expected to close by next week.
The company has also appointed Sanjeev Churiwala as chief financial officer, effective November 16.
Churiwala replaces Vinod Rao, Asia Pacific finance director at Diageo, who has been serving as interim head of finance at USL after PA Murali stepped down as CFO and director earlier this year.
Churiwala comes from LafargeHolcim's Indian subsidiary Ambuja Cements where he was the CFO since early 2011.
The sale of Bouvet Ladubay comes as another asset divestment move that virtually takes apart the ambitious overseas acquisition drive by Vijay Mallya, USL's former promoter, over the past decade.
USL acquired Bouvet Ladubay, set up in 1851 in the Loire Valley of France, in 2006 for about €15 million as Mallya wanted to sell its high-quality wines in India. USL infused around $15 million in the company after the acquisition to raise output to about 8 million bottles. The Indian firm had been importing the sparkling wines from Bouvet in both bottled format as well as bulk imports but is said to have stopped marketing the wines about a month ago.
USL acquired Bouvet Ladubay in 2006 for about €15 million as its then promoter Vijay Mallya wanted to sell high-quality wines in India
A year after it acquired Bouvet Ladubay, USL made its most audacious move by snapping up Scottish scotch maker Whyte & Mackay for nearly $1.2 billion. But the debt piled up by the Indian firm in the process weighed on the group and eventually forced Mallya to bring Diageo Plc, the maker of Johnnie Walker scotch whiskey and Smirnoff vodka, as a majority shareholder.
In a bid to prune debt, USL last year decided to sell Whyte & Mackay to the Philippines-based conglomerate Emperador Inc, owned by billionaire Andrew Tan, for an enterprise value of about £430 million ($725 million then).
In July this year, USL sold some of its stake in beer firm United Breweries Ltd (UBL) to Dutch brewer Heineken, the world's third-largest brewer and the single-largest shareholder of the firm, for Rs 872 crore ($137 million then). With this, Heineken raised its stake in UBL to 42.06 per cent.
Anand Kripalu, CEO and MD at USL, said the company used the money raised from the stake sale in UBL to reduce its net debt to less than Rs 4,000 crore from more than Rs 5,000 crore six months ago.
The stake sale also helped USL to report a net profit of Rs 929.3 crore for the quarter ended on September 30 compared with a loss of Rs 26.9 crore a year earlier. Quarterly net sales rose to Rs 2,122.17 crore from Rs 2,007.8 crore, United Spirits said in a stock-exchange filing.