Business Daily from THE HINDU group of publications
Thursday, Oct 01, 2009
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Business Daily from THE HINDU group of publications Thursday, Oct 01, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Corporate
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Private Placement United Spirits to use part of funds raised for capex Our Bureau Bangalore, Sept. 30 United Spirits Ltd (USL), a UB Group company, plans to capitalise its debt in a bid to contain interest costs. USL expects to raise up to $350 million through either private equity or qualified institutional placement to pre-pay debt related to acquisition of Whyte & Mackay. This would help the company save on interest costs, the UB Chairman, Mr Vijay Mallya, said. USL had raised a debt of $625 million to fund the buyout of Whyte & Mackay in 2007. The company recently sold some 10.28 million treasury shares to retire debt to the tune of $300 million. “We have another 8.38 million treasury shares, which we will decide what to do with at an appropriate time,” Mr Mallya said. Interest rateShareholders approved the company’s fund raising exercise at the 10th annual general meeting on Wednesday. “Our blended interest rate is 8-9 per cent,” said the UB Group Chief Financial Officer, Mr A. K. Ravi Nedungadi. At these rates, the annual interest out go on the remaining portion of the debt ranges between $26 million and $29 million. Further, USL expects to utilise $50-75 million of the proposed $350 million as seed capital for capital expansion, Mr Nedungadi said. The company also plans to set up four large multi-substrate distillery units to augment its capacity, Mr Mallya said. The multi-substrate distilleries can manufacture both molasses and grain-based spirits, which should help the company take advantage of prices in the commodity market and switch manufacturing process from sugarcane to grains and vice versa. More Stories on : Private Placement | Breweries | New Projects
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