United Breweries Limited must release pledged shares before Diageo deal

“We will not comment on the process by which UBHL will ensure this happens.” Releasing the pledged shares could delay the sale to Diageo as nearly 98% of UBHL and related promoter group companies’ holding in USL is pledged to various lenders. A further 2% of the shares are given to Kingfisher Airlines’ lenders as collateral.

On Thursday,brokerage Motilal Oswal said that 3.52 crore shares of United Spirits is pledged with various bankers,out of a total of 3.59 crore promoter shareholding. Some lenders have already started selling the pledged shares. Kingfisher Airlines’ consortium of 17 bankers has sold nearly 26 lakh shares of United Spirits.

UBHL tried to block the sale of pledged shares by filing a case against the consortium of bankers in the Bombay High Court. However,the High Court refused to put a stay order on the sale of pledged shares and allowed lenders to continue with sales. The UB Group continues to remain confident that the sale to Diageo is on track.

“I can confirm that the shares pledged to Kingfisher Airlines banks never formed part of the share purchase agreement with Diageo,” AK Ravi Nedungadi,the chief financial officer of the UB Group told Motilal Oswal. “We have sufficient number of shares to meet our commitment to Diageo even if the KFA bankers sell every share pledged to them.”

However,analysts said that even if the shares pledged to Kingfisher’s lenders does not cause a problem,releasing the rest of the 3.52 crore shares pledged to various lenders of United Spirits could cause a delay.

On Thursday,USL shares closed almost flat on the BSE at R1,823.90.