Bangalore, Sep 22 () From coming Monday onwards, liquor baron Vijay Mallya will have to do a lot of explaining to his shareholders.
Starting from September 24, Mangalore Chemicals and Fertilizers (MCF), United Breweries, UB Holdings, and United Spirits shareholders’ meet are lined up. Vijay Mallya will have to answer queries about the financial health of the companies and moves to turn them around.
Kingfisher with a debt of Rs 9000 crores is the highest debt of Vijay Mallya owned company. Even after FDI in aviation was notified, there is no sign of any foreign investor showing interest while Jet Airways and Spice Jet has investors in talks.
United Spirits with Rs 8600 crore debt is the second highest troubled company, followed by United Spirits and United Holdings. The option is to capitalize his assets in one of his companies and bring funds to stabilize the others. For this he will have to sell his 37% shares in United Breweries with a market share of Rs 17000 or 28% in United Spirits worth Rs 13,000 crores.
Diaego is interested in picking up the shares in United Spirits but it wants administration control and that the ownership of whisky brand Whyte and Mackay is a hindrance because it will invite action from European Union under the anti-monopoly law. The option is then to sell W&M or reduce United Spirits’ share considerably to get Diageo on board.
Yet another option is to dilute his share in United Breweries which has brewery major Heineken with 37.5 per cent share. Vijay Mallya can also sell off shares in MCF. All this will not be enough to infuse equity into Kingfisher. Lenders are pressurizing Mallya to bring in funds to bail out the airlines. Jet fuel suppliers HPCL has threatened to encash the bank guarantee.
For over two decades, Vijay Mallya has been able to show profits and growth but last year he managed to convince that these companies would be turning around. However now these companies are totally beyond limit to bring them around.