Economy Current Affairs - 2019

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Diageo to acquire stake in Vijay Mallya’s USL

International liquor major Diageo to acquire 53.4% stake in Vijay Mallya-owned imageUnited Spirits Ltd. (USL) for Rs.11,166.50 crore. Diageo has entered into imageagreements with United Breweries (Holdings) Ltd. and USL to acquire 27.4% stake in USL for Rs.5,725 crore at Rs.1,440 a share.  As a result of this move, UB Holding and associate companies will sell 19.3% stake to Diageo and a large part of this money will directly go to UB Holdings, which will de-leverage its balance sheet.

After this stake sale, the UB Holdings group’s shareholding in USL will come down to 14.9 per cent. Mr. Mallya will continue as Chairman of USL and UBHL.

As this agreements will trigger the SEBI’s takeover code, Diageo will have to launch an open offer to buy 26% stake from the public at Rs.1,440 a share. The open offer will cost Diageo Rs.5,441 crore. Shareholders need to approve this proposal. On completion of this process, Diageo will hold a total of 53.4 per cent stake in USL with an aggregate cost of Rs.11,166.50 crore.

Analysts held that this was a good deal for Mr. Mallya the deal is in line with market expectations and Mr. Mallya fetched more money than expected.

Month: Categories: Persons in News

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RIL welcomes CAG’s withdrawal of Performance audit on private operators

Reliance Industries Ltd (RIL) conveyed that it has no objection to an audit by any government agency. The company appreciated India’s national auditor Comptroller and Auditor General of India (CAG) decision of not conducting performance audit of RIL-operated Krishna-Godavari oil and gas block off Andhra Pradesh coast. The CAG had said it does not conduct performance audit on private operators.

However,CAG also made it clear that audit of Reliance Industries-operated Krishna-Godavari (KG) oil and gas block off Andhra Pradesh coast has to be a performance audit and not just a financial one.

Month: Categories: Governance & Politics

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