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Mallya may sell 26% McDowell stake to ally

BS Corporate Bureau in Mumbai

The Vijay Mallya-controlled UB Group may divest up to a 26 per cent stake in its spirits subsidiary McDowell & Co to a strategic investor.

"Many international liquor companies have shown interest for picking up a strategic stake in McDowell & Co. We may offload up to 26 per cent in the company," said group chairman Vijay Mallya at the launch of the company's "Scottish Crown" whisky in Mumbai.

However, he refused to divulge the names of the international companies which have expressed interests.

The group's spirits division consists of McDowell & Co and Herbertsons. Mallya is locked in a battle with friend-turned foe Kishore Chhabria over the control of Herbertsons, maker of the Bagpiper whisky.

Mallya said: "I have offered him (Chhabria) a price to buy out his stake. It is now for him to respond to my offer." Chhabria holds over a 48 per cent stake in Herbertsons.

Meanwhile, the UB Group has been ranked the 5th largest manufacturer in the alcoholic beverages industry in the world.

According to Impact Databank, a global news and research firm, the top four slots are occupied by Diageo, Pernod Ricard, Allied Domecq and Bacardi.

With the launch of Scottish Crown, McDowell expects to sell about half a million cases in the first year itself.

Scottish Crown will be rolled out in Mumbai, Kolkata and Goa in the first phase of launch. The scotch whisky is sourced from Morrison Bowmore of Scotland.

McDowell & Co plans to invest Rs 1.5 crore (15 million) in building and marketing the brand.

Mallya said that Scottish & Newcastle has got the Foreign Investment Promotion Board approval for investing Rs 440 crore (Rs 4.4 billion) in the group's beer business.

Mallya said: "FIPB in principle has approved the investment. We are waiting for the formalities to be completed."

Mallya said that he would bring his US-based brewery company into the UB group's fold. Mallya, through personal investment, owns the US -based Mendocino Brewing Company, which controls two breweries in California and New York.

The listed company may be transferred to either UB Holdings or UB Breweries.

Mallya said, "We will be appointing a merchant banker for due-diligence and will arrive at a valuation at the next board meeting. Mendocino will be eventually delisted after the share transfer."

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