McDowell to raise Rs 5,000 cr debt

Also seeks shareholders nod to raise FII investment limit to 49%.

Barely a day after announcing the mega merger of eight spirits companies with itself, McDowell and Company will seek shareholders' permission to increase the FII investment limit to 49 per cent from 24 per cent and the existing borrowing limit five-fold to Rs 5,000 crore.

Vijay Mallya-controlled McDowell will place two separate resolutions seeking the shareholders' approval on increased borrowing limit and FII investment at the company's annual general meeting in Bangalore tomorrow.

Sources in the company said the McDowell board would meet next week to consider various proposals of raising funds, including equity-linked instruments. The board will also consider increasing the authorised share capital.

They added that the company required more funds to finance expansion opportunities in global markets. "Strategic moves to acquire one of the top Scotch labels in the world are being considered," they pointed out.

The UB group today took the initiative to bring all the spirits companies under one brand United Spirits. It will be the world's second largest spirits company with combined sales of 60 million cases, after the merger of Shaw Wallace and Company with itself.

United Spirits, which has 140 brands after the merger, will retain only 50 to 60 brands. It will phase out a few brands and sell or license some others.

A source in McDowell said 30 brands, which include 15 Millionaire brands, contribute 90 per cent to the group's sales. The process will be taken up in 2006 as the companies have supply commitments in various states.

After gobbling up SWC for Rs 1,545 crore, Mallya said he was looking at acquisitions abroad, mostly in Asia or Europe. "There is no opportunity left in India. So our next acquisition will be outside," he said.