Radico Khaitan forms JV with UK distillery

Company to launch rum, vodka brands in UK

Radico Khaitan, the second largest Indian liquor company, has formed a 50:50 joint venture through its wholly owned overseas subsidiary Radico Global with UK-based distillery SPS.

Abhishek Khaitan, managing director, Radico Khaitan, confirmed the development but declined to comment on the investment.

"We have formed a joint venture company in the UK to manufacture and market some of our brands and also the brands of our partner for the European market," he said.

Industry sources said the initial investment would be in the range of $60 million (Rs 270 crore).

The operations at SPS Radico, the new UK joint venture, will be operational by the end of the month. Radico will also hit the UK market with its rum and vodka brands like Contessa Rum and Magic Moments Vodka, through this joint venture.

Radico Global had recently set up a similar joint venture in South Africa with a local company. Sources also said the company had plans for expanding the overseas manufacturing base to 3-4 units by the end of the current financial year. The Rs 1,000-crore liquor major is also scouting for an overseas brand acquisition. "We are consistently in the look out for overseas opportunities for our proposed inorganic growth. Rabo Bank will be our consultant to find such opportunities abroad," Khaitan said.

He said the company wanted to acquire more bottling units in India as part of its capacity expansion plan in the country.

Last year, Radico made a Rs 35-crore acquisition of Brihans Maharashtra Sugar Syndicate, adding eight new brands to its portfolio. These included some bestsellers in the south such as, Brihans Napoleon Brandy, Brihans Premium Whisky and Lord Nelson Rum, among others.

The company today informed the Bombay Stock Exchange that its board had considered and approved a proposal for enhancing the amount proposed to be raised through the issue of equity-related instruments from $100 million to $125 million.

Accordingly, an extra ordinary general meeting of the shareholders of the company would be held on July 14, 2006, to seek approval by way of special resolution to the above mentioned proposal.