This ruling comes seven months after a single bench judge of the court allowed UBHL to sell 13.61 million USL shares to Diageo, even while the court was hearing winding up pleas against UBHL that were filed as early as March 2012.
At present Diageo controls 26.37% stake in USL, which it purchased for over $800 million.
A list of petitioners, mainly lessors of the grounded Kingfisher Airlines (KFA), that include Rolls Royce & Partners Finance Ltd, RRPF Engine Leasing Limited, BNP Paribas, Avions De Transport Regional GIE and IAE International Aero Engines AG had filed winding up petitions against UBHL, which has over Rs 5,000 crore exposure in KFA.The high court, on Friday, ruled that the USL share sale is subject to the final outcome of the winding up pleas against UBHL. "The order of company judge permitting sale of 1.36 crore shares of USL to Diageo is set aside as the single bench cour t could not have passed an order in this regard prior to admission of winding up petition and hearing other creditors," said division bench headed by Justice N Kumar.
The court also noted that the fixing of USL's share price was not proper and added, "The price fixed (Rs 1,440) does not represent the true market value. The price quoted on NSE is a factor, which should be taken note of at the time of valuation."
"We are disappointed to hear that the court has over-ruled the previous order that granted leave to UBHL under sections 536 and 537 of the Indian Companies Act in respect of the five winding up petitions then pending against the company to enable the sale of USL shares," read a statement from Diageo.
Diageo went on to state that they were also disappointed to have been brought into the private dispute between KFA and its creditors.
Reacting to the court's pronouncement, Vijay Mallya, who continues to hold a 11.07% stake in USL valued at approximately Rs 4,000 crore said, "We will take all necessary steps to protect Diageo's interests as well as our own."
Interestingly, the court order alters the shareholding pattern in USL, increasing Mallya's stake to around 18% in USL, leaving Diageo with approximately 20% stake. Whatever be the revised structure, as per a shareholder pact signed between Mallya and Diageo in 2012, Mallya will surrender all voting rights in favour of Diageo for the next four years, giving the maker of Johnnie Walker whiskey complete management control even with a low shareholding base.
A separate statement issued by UBHL said that while it was studying the court judgment, "the obvious option that we have is to file an appeal before the Supreme Court when it re-opens in January."
The ruling though is yet another hurdle to the world's largest spirits company Diageo, who had initially planned to buy 53.4% stake in USL for $2.1 billion. The company had to settle for a 25.02% stake in USL after its open offer to buy 26% from public shareholders had collapsed with just 0.4% tendering shares.
In addition, the USL buy is also giving Diageo a tough ride on its home turf. Due to anti-competitive concerns raised by the Office of Fair Trading (OFT) in the United Kingdom, Diageo has planned to sell off parts of Whyte & Mackay, which USL had purchased for $1.18 billion.
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGfRucNxJaLFqI-XA5E9C5buxycfg&url=http://timesofindia.indiatimes.com/business/india-business/United-Spirits-Ltds-share-sale-to-Diageo-void-HC/articleshow/27696893.cms
Put the internet to work for you.
0 comments:
Post a Comment