Whyte & Mackays Indian Owner Moves To Raise Funds

[John]

Indian group United Spirits is to sell new shares worth £190-£220million to institutions to help reduce its debt pile of almost £890million, according to a report out yesterday.

A large part of the debt was incurred in United's £595million acquisition of whisky distiller Whyte and Mackay (W&M) in 2007.

The report said the company, listed on the Bombay Stock Exchange, would sell shares after failing to sell a stake to private-equity firms or Diageo, which earlier this year was in discussions to buy a 15% holding in United.

It was also reported at that time that United, led by Indian billionaire Vijay Mallya, was aiming to sell 49% of Glasgow-based W&M, although that was later denied and United said it was committed to making the Scottish business a major international spirit company.

United, the world's third largest spirit-maker by volume, could place new shares with institutions as early as this week, three different sources suggested, although the company declined to comment.

The firm said earlier it aims to cut its debt to below £500million by the end of March 2010, and in June it sold shares held in treasury to raise about £118million and pay down some loans.

It still has more than 8million shares in treasury which it could sell, but sources said it would opt to issue new shares after gaining shareholder approval last month to raise up to £220million.

Shares in United Spirits, which is valued at £1.33billion, have risen just 3.3% this year compared with a 76% rise in the main Bombay share index.

The Press and Journal reported in August that a Highland distillery was likely to bear the brunt of job cuts at Glasgow-based W&M.

It said about 100 jobs could go as a result of a review being carried out in light of the recession and also a "punitive UK legislative climate"?.

Up to 85 posts in Scotland were under threat, with a grain distillery at Invergordon, in Easter Ross, thought to be in line for more than 30 job cuts, potentially a quarter of its 133-strong workforce.

W&M said all seven Scottish sites were affected, with about 15 sales posts outside the country also at risk among a total payroll of 574.

The firm has malt distilleries at Fettercairn, in Aberdeenshire; Dalmore, at Alness in Easter Ross; on Jura and at Tamnavulin, on Speyside.

John

Source: Press & Journal