United Spirits may repay W&M loan before due date

United Spirits, the country's biggest liquor maker, may consider repaying loans taken to purchase Scottish liquor maker Whyte & Mackay Group before the debt is due to lower the interest burden.

"I have a perfect track record of leveraging, making acquisitions and de-leveraging before due dates," Vijay Mallya, the chairman of the Bangalore-based UB Group, told journalists in New Delhi today. "I have many options," Mallya said, adding that he could sell shares of Whyte & Mackay or United Spirits.

United Spirits purchased Whyte & Mackay in May for 595 million pounds ($1.18 billion) to acquire the malt whisky distilleries in Scotland and a range of spirit brands. The company's average debt cost, including the Rs 5,144 crore ($1.3 billion) borrowed to pay for the purchase, is about 8.48 per cent.

"The profit from Whyte & Mackay alone services the entire debt," Mallya said, without providing details. "I have a two-year moratorium on the loans, so where is the hurry."

Mallya in May had said United Spirits would consider listing overseas.

United Spirits has treasury stocks worth more than Rs 2,000 crore, Mallya said today. This is stock a company issues, then buys back and places in the company's treasury, where it earns no dividends and carries no voting privileges.

Glasgow-based Whyte & Mackay sells the W&M Scotch and Jura single-malt brands, Dalmore single highland malt and Vladivar vodka among other spirit brands.

Whyte & Mackay owns the Invergordon distillery, with a capacity of producing 40 million litres a year, and four malt whisky distilleries in Scotland. The company's bottling facility in Grangemouth can produce 12 million cases annually. The price paid by United Spirits includes 175 million pounds of Whyte & Mackay's debt.

United Spirits was formed last year by folding McDowell & Co, Shaw Wallace & Co, Herbertsons and other liquor makers in the UB Group into a single entity. The company owns 145 brands and is focusing on 40 key brands.

United Spirits had sold the equivalent of 66 million cases of spirits in the year ended March 31, compared with 9 million cases by the 163-year-old Whyte & Mackay, United Spirits said in May.