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26 per cent stake not enough -- SAB wants `say' in BrewCo management

Boby Kurian

BANGALORE, Oct 24

IN a significant move, South African Breweries (SAB) International Ltd has expressed its desire for a crucial place in the management of BrewCo, a demerged beer only entity of UB group. This is essential for SAB to sustain interest in picking up a strate gic minority stake in BrewCo.

Speaking to Business Line, Mr Andre Parker, Managing Director (Asia & Africa) SAB International Ltd, said his company was looking forward to having an important say in the management of BrewCo, if it succeeded in gaining a strategic foothold. Replying to a specific query, Mr Parker quipped: ``What will we do with 26 per cent otherwise, specially after making significant investment.''

It may be recalled that UB group has invited bids from international brewers for 26 per cent stake in BrewCo. SAB India Ltd, along with Interbrew, Heineken and Carlsberg, are tipped as frontrunners in the race.

Meanwhile, reacting to thee SAB statement, highly-placed UB sources said they were willing to accommodate the strategic partner in the management of BrewCo. ``We are willing to discuss the matter with our future foreign ally. It is not that we want to dr ive them out after taking money,'' a senior UB official added.

It is also reliably learnt that SAB is pitching for more than 26 per cent holding in BrewCo. ``The fact is that UB is still not clear what they are prepared to shed, both in equity and management control,'' SAB officials said. ``We don't want to sit and watch what is happening after investing millions of dollars, specially as the history of UB's financial management is not a great story,'' company officials said.

Taking a cue from the latest development, analysts hinted at a ``mismatch between what SAB expects and what UB is willing to give'''. In fact, the chance of any multinational coming for 26 per cent stake and a simple presence in the company board is not a bright prospect, analysts added.

UB is gearing up to offload 26 per cent in the beer company from equity base expansion through fresh capital infusion. Mr Mallya, who holds 52 per cent in BrewCo, has ruled out ceding management control to a foreign partner.