Vijay Mallya has drawn up plans to invest over $30 million overseas which includes the acquisition of African and Eastern (Near East} Ltd "" a five-decade-old marketing and distribution firm in the Gulf owned by Unilever Plc "" for $18 million.
The acquisition is aimed at further strengthening UB's presence through its beer and spirit brands in the Gulf. The UB chairman has already initialled an MoU with Unilever to acquire the company.
African and Eastern (Near East) Ltd, which has its registered office in United Kingdom, will become part of the Dubai-based UB International within a couple of months. The wholly-owned subsidiary of Unilever Plc has a dominant presence in the Gulf through its distribution network for liquor, beer and other alcoholic beverages.
UB also proposes to acquire a controlling stake of 70 per cent in the equity base of a Zambian unit called Northern Breweries Ltd through its African joint venture, UB Lonrho Ltd. Mallya said the group has drawn up plans to invest in breweries in various African countries to enhance the presence of the group in the continent. UB also has a wholly owned pharma subsidiary in Kenya as well as a few paint-making units. Mallya through one of his investments arms, also owns a game sanctuary in South Africa with vast tracks of forest and a hotel. The property is sandwiched between Johannesburg and Sun City.
The UB group also proposes to invest around Rs 17 crore in two joint venture breweries in Nepal and Sri Lanka. The group already owns Nepal Liquors Pvt Ltd along with some Nepalese partners.
However, it is acquiring 51 per cent stake in an existing brewery in the Himalayan kingdom called Shri Nepal Breweries (Pvt) Ltd for a consideration of Rs 2 crore and have a stake of 51 per cent in. The UB group has already entered into an agreement with the management of the Nepalese brewery in this regard.
For the Sri Lanka project, the UB group has entered into an understanding with A P Casie Chetty and Company for a joint venture brewery. The UB group proposes to pick up 26 per cent stake in the Lankan venture styled as United Breweries Lanka Pvt Ltd. The investment in equity is estimated at around Rs 15 crore.
Since most of these investment proposals exceed the limit prescribed under Section 372 of the Companies Act 1956, the holding company, United Breweries Ltd, through which Mallya routes his investments abroad, has decided to seek the approval of the shareholders at annual general meeting scheduled for September 30.
Special resolutions would be moved at the meeting for the approval, a company official said. The company has also decided to seek the concurrence of the shareholders for a global depository receipt (GDR) issue to facilitate overseas investments as well as a borrowal limit enhancement to Rs 500 crore inclusive of the GDR, the official added.
