Bangalore, March 7
THE much-chronicled battle between the UB Group Chairman, Mr Vijay Mallya, and Mr Kishore Rajaram Chhabria for control over Herbertsons Ltd formally passed into history on Monday with the Supreme Court giving its nod for an out-of-court settlement between the two liquor majors.
As the apex court blessed the consent terms, UB will acquire Mr Chhabria's entire 49.06 per cent stake in Herbertsons, the third largest domestic spirits company, for a consideration of Rs 131.16 crore.
Mr Chhabria will walk out with the subsidiary company, BDA Ltd, which he had merged with Herbertsons. This merger occurred after he joined hands with Mr Mallya in 1992 following a bitter split with his elder brother Mr Manu Chhabria, who controlled Shaw Wallace & Co Ltd, the second largest spirits company in the country.
Business Line first reported the amicable settlement between the two camps, which led to Mr Chhabria depositing his entire shareholding in an escrow account with Kanga & Co, pending a nod from the court.
"The UB Group along with its associates will now hold 92.21 per cent shares in Herbertsons Ltd, once 49.06 per cent shares, which were held by Mr Chhabria and his companies, are transferred from the escrow account," Mr Ravi Nedungadi, President & Chief Operating Officer of the UB Group, said. "On receiving the certified copy of the order of the apex court, the escrow agent will transfer the shares to the UB Group for Rs 131.16 crore," Mr Nedungadi said. "This now clears the path for consolidation of UB's spirits business and formation of United Spirits Ltd to synergise all its liquor businesses under one umbrella," he added.
UB in the coming months is expected to merge McDowell & Co, Herbertsons and Triumph Distillers & Vintners under the United Spirits banner. The process will be kick-started shortly with independent valuation of each of the three entities for the purpose of share swap ratio.
The company is the world's fourth largest spirits marketer in the world and is likely to sell nearly 40 million cases during the ongoing financial year. The contribution of Herbertsons is significant with its three major brands Bagpiper Whisky, Honey Bee Brandy and Romanov Vodka contributing almost 10 million cases.