The market is abuzz with talks of liquor baron and Kingfisher Airlines boss Vijay Mallya almost finalising a deal with Diageo Plc to sell his stake in his cashcow United Spirits Ltd (USL) to retire debt in troubled Kingfisher Airlines.
Mallya is said to be in London and meeting Diageo top bosses to work out the modalities.
Market sources said Mallya is asking for a high premium considering the market leadership of USL and the stake he would be parting with.
Though details of the deal are yet to be revealed, it is learnt that that Diageo is picking up a sizeable stake in USL, believed to be 27 per cent for over Rs 750 per share.
Mallya is believed to looking at a valuation of more than Rs 1,000 per share. An UB group official declined to comment and calls made to UB Group chief financial officer Ravi Nedungadi remained unanswered.
FULL COVERAGE:Kingfisher Airlines crisis
Diageo also did not respond to an emailed query from MAIL TODAY till writing of this report. Diageo, the world's largest spirits company, has been keen to control the Indian spirits market since a long time and a stake in USL will give this market access.
Its brands include Smirnoff, Johnnie Walker, Baileys and Guinness. Promoter holding in USL is approximately 28 per cent.
Potential deals on previous occasions have failed due to disagreements over the company's valuation.
Now, a stake sell in USL can help the UB group to retire its debt burden as well as to clean up the mess at Kingfisher Airlines, which has a net debt of about Rs 7,000 crore and needs at least Rs 2,200 crore to revive its operations.
With Mail Today Bureau