United Spirits sells stake in United Breweries

India’s largest liquor group United Spirits Limited (USL) will focus solely on spirits having sold its entire share in United Breweries (UB) to Heineken International BV.

Vijay Mallya is the chairman of United Spirits

The Diageo-controlled firm sold its 3.21% stake in UB – India’s largest beer company – for Rs 872 crore, upping Heineken’s share to 42.2% while UB’s stake stands at 32.6%.

In a statement, USL said it sold 8.5 million shares at Rs 1,030 per share through block deals.

“Following the completion of this sale, United Spirits Limited will hold no shares in United Breweries Limited,” USL said in a statement.

In July 2014, Diageo confirmed its £1.1 billion acquisition of an additional 26% of USL’s shares, bringing the company’s total stake to a majority of 55%.

USL has been plagued with financial hurdles over the last couple of years, despite reporting a 21.4% rise in its third quarter profits to 31 December 2014 with a net profit of Rs 78.81 crore and a 2.3% rise in net sales.

However, the tables turned in its latest financial quarter with the group posting a net loss of Rs 1,799 crore (£17.4m) from January to March 2015 as a government investigation was launched into USL’s accounts.

It blamed the drop in sales on a write-down of the sale of its Whyte & Mackay Scotch whisky business to Emperador for an estimated £430m last year.

In April, USL’s board said it had “lost confidence” in chairman Vijay Mallya following the outcome of an internal inquiry into USL’s finances and called for the billionaire to resign.