The Hindu Business Line : Associated Breweries: UB to shell out Rs 15 cr more for acquisition

THE UB group may cough up nearly Rs 15 crore more for completing the acquisition of the Mumbai-based Associated Breweries & Distilleries Ltd following deferred payment for the second tranche of share purchase.

UB Holdings Ltd, which acquired 65 per cent stake in the Irani family controlled company in October 2000, had agreed to purchase the remaining shares (put option against acquirers) for Rs 20.47 crore within three years but will now execute a corporate guarantee for an amount not exceeding Rs 35 crore as it has entered into an understanding with the sellers for rescheduling the payment over the next few years.

Top UB officials confirmed revision of the price and rescheduling of the payment for the 35 per cent stake in ABD. However, the original promoters of the acquired company have transferred the remaining shares to UB. Following this, UB Holdings Ltd will execute a corporate guarantee favouring Ms Mehroo Irani, Mrs Zinia Lawyer and Ms Bakthawar Chinoy for an additional amount of up to Rs 14.53 crore, enhancing the guarantee limit to an amount not exceeding Rs 35 crore. A special resolution on revision of the put option price will come up before the company's AGM to be held in Bangalore next week.

The acquisition of ABD was seen as a strategic move by Mr Mallya to outsmart SABMiller which was then conducting due diligence on the company that had two lakh hectolitre capacity and owned popular beer brands such as London Pilsner, London Diet and Maharaja Premium. The initial deal to buy 65 per cent stake and management control was closed within three weeks as the leading domestic brewer went on an acquisition spree in late 2000 to choke transnational brewers such as SABMiller and Foster's.

The latest move for rescheduling the payment for the second tranche of shares comes in the wake of speculation that UB was not keen on buying the remaining 35 per cent and would look at warehousing the same with some financial institutions.

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