Diageo Plc has said that it will not be possible for it to acquire the remaining shares of United Spirits within the required deadline as IDBI has refused to release the pledged shares.
The world’s largest liquor maker has so far acquired 25.02 per cent stake in Vijay Mallya’s United Spirits through a share purchase deal announced last year.
Nov 11 deadline
The British liquor maker said it is yet to mop up the remaining 2.38 per cent through its subsidiary, Relay BV, from the USL Benefit Trust. The company said SEBI had set a deadline of November 11, for acquiring all the shares totalling 27.4 per cent but “IDBI has refused to instruct the security trustee to release the pledge over the remaining sale portion of shares”.
This was despite repayment of the entire outstanding amount due to IDBI.
Diageo pointed out that the remaining shares (34.59 lakh shares) had been pledged with United Trust of India Advisory Services on behalf of Punjab National Bank and IDBI Bank to secure outstanding loans from United Spirits.
After USL repaid PNB, the bank issued a no-objection certificate to United Trust of India Advisory Services to release the pledged shares. USL also repaid the outstanding amount due to IDBI but it refused to release the pledged shares despite a legal notice being sent to the bank.
Writ petition
Diageo through Relay BV said USL and USL benefit trust have filed a writ petition against IDBI and the security trustee in the High Court of Karnataka on November 6, seeking relief in this matter.
Diageo last year had said that it plans to pick up majority stake in USL for a total consideration of over Rs 11,000 crore.
Instead, the company could pick only 25.02 per cent stake in USL for a total consideration of Rs 5,235.85 crore due to subdued response to its open offer to public shareholders.
The USL stock remained flat at Rs 2,393.95 at the end of trading on Friday on the BSE.