Wants to know source of funds, equity structure.
The Foreign Investment Promotion Board has told United Breweries Holdings Ltd (UBHL), the parent company of Kingfisher Airlines, to clarify some issues on an application to bring in foreign investment.
Official sources said the clarification was sought on source of funds and equity structure of the entity, post investment.
UBHL had sought FIPB approval last year for the proposal, to issue convertible equity warrants and allot fully paid-up equity shares on their conversion, to raise Rs 219 crore.
FIPB gave in-principle approval last July; another seven approvals are required from various ministries for bringing in the money. These won’t happen unless the clarifications sought are cleared; FIPB wrote formally to UBHL earlier this year.
Sources said the company wanted the funds for downstream investment in Kingfisher Airlines.
Earlier, the Department of Revenue had reportedly opposed this proposal, stating in a note to FIPB that the money was not equity but rather a loan from Nexgen Capital and Standard Chartered Bank, routed through FirStart Inc as investment.
Therefore, the company was asked to clarify the source of the funds it proposed to bring in.
Meanwhile, the Department of Industrial Promotion and Policy brought out press notes 2 and 4, modifying the guidelines for calculation of direct and indirect foreign holdings in a company with retrospective effect.
So, the second clarification is for defining the equity structure of UBHL and related entities in Kingfisher, post the downstream investment by UBHL in its airline venture.
A faxed query to UBHL on these issues did not elicit any response.
