Liquor manufacturer United Spirits Limited (USL) today said it has got the Appellate Authority for Industrial and Financial Reconstruction's (AAIFR) nod for the merger of Balaji Distilleries (BDL) with itself.
"AAIFR has sanctioned the rehabilitation scheme of BDL vide their order dated November 29, 2010," USL said in a filing to the Bombay Stock Exchange (BSE).
Under the scheme of arrangement cleared by the AAIFR, BDL will be merged with USL on a going concern basis with retrospective effect from April 1, 2009, it said.
All assets and liabilities of the breweries division of BDL will be transfered to Chennai Breweries Pvt Ltd (CBPL), a wholly owned subsidiary of BDL, it added.
In consideration of the above, USL shall issue shares to shareholders of BDL in the approved share swap ratio of two shares of USL for every 55 BDL shares, it said.
"CBPL will become a 100 per cent subsidiary of USL," it added.
BDL has been exclusive contract manufacturing unit for United Spirits and United Breweries since its inception in 1983.
USL earlier did not have a production facility in Tamil Nadu, which accounts for nearly 12 per cent of its national sales, and was dependent on contract manufacturing arrangements.
The company sells about 12 million cases of spirits every year in Tamil Nadu, it said.
Shares of United Spirits today closed at Rs 1,454.15 on the BSE, up 1.77 per cent from the previous close.