Vijay Mallya-promoted United Spirits Ltd is considering to sell 49 per cent stake in its Glasgow based subsidiary Whyte & Mackay to pay off debt, according to a media report.
According to the The Times, the move is a part of a drive to cut UB Group's $4 billion (2.5 billion pounds) debt.
Mallya told the daily that that USL, the spirits holding group that has debts of $1.68 billion, was considering sale of a 49 per cent stake in Whyte & Mackay, which was bought in 2007 for $1.2 billion.
Last fiscal, USL had posted a total income of Rs 6,422.72 crore (Rs 64.22 billion) with a net profit of Rs 403.04 crore (Rs 4.03 billion).
So far this fiscal, in the nine months period ended December 31, 2011 the company's total income stood at Rs 5,778.14 crore (Rs 57.78 billion) and net profit was at Rs 332.77 crore (Rs 3.32 billion).
The report also quoted Ravi Nedungadi, chief financial officer of the UB Group, saying that there had been interest from 'a number of private equity players' in W&M,
He said that UB Group would retain ownership of 51 per cent and that the proceeds would be used to cut USL's debt and to help fund an expansion drive, including the construction of new distilleries and India's biggest glass plant.
Nedungadi, however, denied that the cash would be used to pay off any of Kingfisher Airlines' debt.
"If we were to sell or dilute any of those assets the proceeds would go only to repay or reduce United Spirits' debt," the report quoted him as saying.
Image: Vijay Mallya