Global FIs anchor UB's Rs 600cr QIP issue

A clutch of global financial institutions led by T Rowe Price, HSBC and an investment arm of the Government of Singapore are the lead investors in the Rs 600 crore qualified institutional placement (QIP) issue of UB Holdings.

According to Ravi Nedungadi, president and chief financial officer, UB Group, the enormous interest among global financial institutions underlined their faith in the UB Group. UB Holdings is the flagship holding company of the UB Group, which has a market capitalisation of $9 billion.

The qualified institutional buyers (QIB) subscribed to more than 5 million shares of Rs 10 each at Rs 1,110 a share aggregating Rs 600 crore on a private placement basis.

The publicly listed UB Holdings is the majority shareholder in Kingfisher Airlines as well as Deccan Aviation, which are set to merge in the near future. UB Holdings is expected to hold nearly 70 per cent in the merged entity, which will be named Kingfisher Airlines.

UB Holdings also controls the group's spirits and breweries business.

UB Holdings borrowed heavily over the past year to expand its verticals. It is now using the QIP route to retire a part of its debt, which is around Rs 1,000 crore.

Vijay Mallya, chairman, UB Group, in a recent statement to the shareholders, said, "UB Holdings is set to build further on the value propositions of its fine investee companies. As the incubator for new businesses, we have had to borrow extensively from time to time. I believe that it is now time to refinance the company and raise equity to substantially repay the debt on the balance sheet."

Besides the Rs 600 crore raised through the QIP route, the company would raise another Rs 700 crore by issuing warrants to FirStart, a member of the promoter group on a preferential basis.