The Hindu Business Line : Shaw Wallace, United Spirits to discuss merger

“We are evaluating a number of
options to ensure creation of further wealth to all shareholders of Shaw Wallace,” says the Shaw Wallace Director, Mr S.R. Gupte

Our Bureau

Kolkata, Sept. 29 The respective Board of Directors of United Spirits Ltd and Shaw Wallace & Company Ltd will begin deliberations “within the current fiscal” on a possible merger of the latter with the former.

This was stated by Mr S.R. Gupte, Director of Shaw Wallace & Company Ltd, while speaking to newspersons at the conclusion of the company’s 61st annual general meeting here today.

Mr Gupte officiated as Chairman of the meeting in the absence of Mr Vijay Mallya, Chairman of Shaw Wallace & Company Ltd.

Earlier, in his address to shareholders, Mr Gupte said: “We are evaluating a number of options to ensure creation of further wealth to all shareholders of Shaw Wallace. This could include a possible merger of Shaw Wallace & Company Ltd with its parent United Spirits Ltd. Such a merger could potentially enhance synergies between the two entities, resulting in improved market coverage, profits and market cap.”

New biz plans

On whether Shaw Wallace would consider venturing into any new lines of business, Mr Gupte said: “we rather continue to do what we do best and concentrate on a business that we are globally competitive in.”

He said sales of the company’s brands had picked up by over 20 per cent in 2006-07 over the previous year. He expected that such a rate of growth would be maintained in the current fiscal.

During 2006-07, Shaw Wallace & Company Ltd recorded a net sales turnover of Rs 138.85 crore, against Rs 115.52 crore in 2005-06.

Taking into account other income of Rs 93.3 crore in 2006-07 (Rs 177.86 core in 2005-06), the total income for the year under review stood at Rs 232.15 crore (Rs 293.38 crore). The profit before tax was Rs 114.80 crore (Rs 88.63 crore) while the profit after tax was Rs 82.07 crore (Rs 46.86 crore in 2005-06).

A dividend of Rs 1.50 (15 per cent) on equity shares of face value of Rs 10 each was declared for the year gone by.

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