PE Firms In Talks for United Spirits Stake

MUMBAI (Reuters) – India’s United Spirits (UNSP.BO), the world’s third largest spirits maker, has received term sheets from private equity firms Blackstone (BX.N), KKR and Capital International interested in buying a stake worth $250-300 million in the company, the Economic Times said on Wednesday.

The company’s talks with financial investors were proceeding along with other plans to raise cash and pay down a part of its debt, the report said citing people familiar with developments.

The three private equity firms were doing a due diligence and a possible transaction with any of them would happen at a slight premium to the prevailing market price, some time soon, the paper said.

The deal could see 10 percent of the firm changing hands, it added. United Spirits has a current market capitalisation of around $1.82 billion.

The alcoholic drinks maker would probably be issuing fresh shares to the new investor along with the sale of the remaining treasury stock, the report said.

“We do not comment on market speculation,” a spokesman for the UB Group said.

On Tuesday, Shaw Wallace (SHAW.BO), which is a part of the United Breweries Group, sold 10.28 million shares of United Spirits, raising 9.05 billion rupees ($188 million).

This would be used for early repayment of the loan taken to acquire Scottish spirits maker Whyte & Mackay in 2007.

The company said that with this and other payments made, it would have repaid about half of the original loan in the process, saving about 850 million rupees in interest costs.

On Tuesday, UB Holdings, Chief Financial Officer Ravi Nedungadi also said that the company was looking to raise about $250 million through various means which could include sale of its remaining treasury stock of 8.35 million shares, a placement to institutions or with private equity funds.

($1=48.1 rupees) (Reporting by Janaki Krishnan; Editing by Lincoln Feast)