FIPB defers decision on United Breweries warrants proposal

The Foreign Investment Promotion Board (FIPB) in its next meeting will again consider the proposal of United Breweries Holdings to raise Rs 708 crore by issuing convertible equity warrants.

FIPB meeting, which is scheduled to be held on June 19, 2009 will again consider the company's proposal, according to a finance ministry circular.

In its earlier meeting last month, FIPB had deferred the decision on the proposal made by Vijay Mallya-promoted United Breweries to raise Rs 708 crore by issuing 63.87 lakh fully convertible equity warrants.

FIPB had noted that the Department of Revenue (DoR) had not supported the proposal on the grounds that the money sought to be raised is "primarily a loan from Nexgen Capital and Standard Chartered Bank routed through FirStart Inc as investment".

The board added that the DoR had not supported the proposal because "Vijay Mallya's net worth is less than the amount for which he has given guarantee and the gap is not explained".

UBHL had approached FIPB, for making downstream investments in Kingfisher Airlines and a host of other subsidiaries and associate companies.