Heineken poised to take majority stake in United Breweries

Heineken could become a majority shareholder in United Breweries after reportedly approaching the Indian authorities about buying the shares confiscated from the company’s former owner, Vijay Mallya.

Vijay Mallya’s $93m superyacht has been impounded in Malta.

Reports from Delhi say that the global brewer, which already has effective control through a 44% shareholding, has approached the Indian authorities about buying the 15.2% tranche of shares seized by the courts from the fugitive former owner Vijay Mallya.

And in the latest move against the embattled self-styled “king of the good times” Mallya’s $93m superyacht, Indian Empress, has been impounded in Malta for non-payment of the crew’s wages since last September.

Mallya’s shares in UB were confiscated by India’s Economic Directorate as part of the ongoing fraud and money laundering actions against him. Mallya fled to the UK in March 2016 and is now facing extradition proceedings in London. The next hearing is due next week.

At the current market price the confiscated shares in United Breweries are worth approximately £530m. Any sale proceeds would be used to pay down some of the £1.2bn debts to 17 banks on which Mallya has defaulted as a result of the collapse into bankruptcy in 2012 of his Kingfisher airline.

In reality, Heineken is the only feasible purchaser of the shares as it already exercises effective control in UB. Taking hold of Mallya’s stake would give Heineken 58% of the Indian brewer but under the articles of association, Mallya is entitled to remain chairman for life despite him being barred from holding directorships in listed companies.

Mallya, who has consistently denied all charges against him, has been living on bail in the UK since August last year. He was recently given permission by a UK court to increase his weekly spending to £18,000 to maintain his lifestyle.

Meanwhile, his other assets have been frozen and subject to series of actions designed to put pressure on him. His luxury home in Mumbai has been sold compulsorily as has his personal jet. In addition to the action by the Indian Empress’s crew to claim outstanding pay, Mallya still faces demands for payment from former Kingfisher Airlines staff and from stars of various sporting teams he backed including the Barbados Tridents cricket side.

In addition, a takeover of the Force India Formula 1 team may still be being negotiated. Mallya is the prime backer but there have been reports of interest from a consortium led by British energy drinks company Rich Energy. Force India has denied that a $280m deal was being discussed.

However, sources now report that the delay in Force India changing its name (and possibly its association with Kingfisher) for the grand prix season which begins next week could be because new owners would wish to change the name in time to encompass a full season.