After today's decison of the Debt Recovery Tribunal, Heineken has gained full control over India’s leading brewing group United Breweries Limited (UBL), maker of India's top-selling Kingfisher lager and which has a 50 per cent share in India’s beer market. The Dutch brewer today announced that it acquired an additional 39,644,346 ordinary shares taking its shareholding in UBL from 46.5% to 61.5%. Based on Tuesday's close at INR 1,466 Indian rupees, the acquisition would be worth INR 58.1 billion (USD 781.3 million).
The shares belonged to the fugitive liquor baron Vijay Mallya, who fled India to the UK in March 2016 after the collapse of his heavily indebted Kingfisher Airlines. Following his escape to the UK, the former chairman of UB Group was accused of money laundering and fraud charges over USD 1.4 billion of loans taken out from Indian banks which authorities argue he had no intention of repaying. As a consequence, the Enforcement Directorate (ED) attached Mallya’s properties including his stake in Indian companies. Several of his possessions in India have already been sold, including his huge beachfront Kingfisher Villa in Goa. (inside.beer, 19.4.2017)
Last month the ED transferred the shares to the lenders after the Prevention of Money Laundering Act (PMLA) court ordered the agency. (inside.beer, 29.5.2021) The PMLA court, however, said in case Mallya is found innocent later – a very unlikely event - the banks will have to restore the properties back to Mallya after recovering their dues.
Mallya, who remains on bail on an extradition warrant executed four years ago by Scotland Yard, became internationally better known through its co-ownership in Formula One team Force India, which he acquired in 2007 for EUR 90 million together with Dutch businessman Michiel Mol and which went into administration in July 2018 (inside.beer, 30.7.2018).
In addition to the recent purchase, Heineken has the chance to stock up its shareholdings in UBL by another 11 per cent which Mallya with his related entities still holds in the company and which are pledged or encumbered in one or other forms. This would bring Heineken’s stake in UBL above the 72 per cent mark.