United Spirits Ltd, a Diageo-owned alcoholic beverages manufacturer, has sold a non-operational subsidiary to building materials manufacturer NCL Industries Ltd for Rs 30 crore (around $4 million).
Due to its non-operational status, Tern Distilleries Pvt Ltd has not recorded any turnover, and has a net worth of around Rs 13.4 crore, United Spirits said in a stock exchange filing.
NCL Industries, based in Hyderabad, is involved in the manufacturing of products including cement, ready mix concrete, cement-bonded particle boards, and doors.
In a separate filing, NCL Industries said it had acquired over 102.67 million equity shares of Tern. It intends to use the land owned by the former United Spirits subsidiary to set up a 2,000 tonnes-per-day cement grinding unit. The company added that it has no plans of entering into the distilleries business.
United Spirits had bought Tern in 2009. The latter had been dealing in extra-neutral alcohol before it suspended operations in 2015.
Interestingly, the development comes after VCCircle in October last year reported that United Spirits was selling Hyderabad-based Tern to a Singapore-based entity believed to be a part of an Andhra Pradesh-based business group.
Shares of United Spirits ended trading on Monday 1.49% up at Rs 634.6 apiece, while those of NCL finished the session 1.01% down at Rs 147.7 apiece.
United Spirits, formerly a part of businessman Vijay Mallya’s liquor empire, is India’s top alcoholic-beverage company. It makes, sells and distributes brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, Royal Challenge and McDowell’s No.1.
Per its annual report for the 2019-20 financial year, the company reported consolidated net sales of Rs 28,823.7 crore along with net profit of Rs 620.6 crore.