UB group to consider rights issue

The board of directors of United Breweries will meet next week to consider a proposal for a rights issue.

The company today informed the Bombay Stock Exchange that its board was scheduled to meet on September 28 to consider the proposal to issue further equity shares to existing shareholders on a "rights" basis. Company executives said that the amount to be raised from the issue would be disclosed only after the next week's meeting.

Last month, company executives had told Business Standard that they would invest close to Rs 1,200 crore in capacity expansion of its breweries to manufacture beer. The rights issue is expected to finance that expansion, though there was no confirmation from the company on the same.

The expansion of the brewery capacity will entail setting up greenfield projects in Andhra Pradesh, Uttar Pradesh, Madhya Pradesh and Tamil Nadu. The expansion would be completed in three years, company executives said. Post-expansion, the group's beer manufacturing capacity will increase to about 170 million cases from the 100 million at present.