Mallya suffers as USL take on exports

Diageo-led spirits producer United Spirits (USL) has blocked a key revenue stream for the beleaguered UB Holdings by taking control of exports.

UB Holdings boss and former majority stakeholder of USL Vijay Mallya was recently branded a ‘wilful defaulter’

UB Holdings (UBH), headed by ‘wilful defaulter’ Vijay Mallya, previously had the rights to export the various spirits brands of USL across some global markets through its subsidiary UB Global.

But with Diageo recently acquiring a controlling 54% stake in USL from Mallya, this function has been assigned to USL’s emerging markets division.

UBH is already suffering from large debt problems, along with its chairman being tagged a wilful defaulter, preventing the company from going to banks for funding.

UBH is burdened with debt of close to INR 4,000 crore (£400m), beside having written off as much as INR 2,500 crore (£250m) in terms of loans to now-grounded Kingfisher Airlines.

The company also has been forced to provide on its balance sheet another INR 1,300 crore (£130m) for doubtful loans lent by USL, according to the Business Standard.

The board of directors of USL has instituted an inquiry into how its resources had been used under Mallya’s management for UBH and its associates.

USL is currently consolidating its emerging markets strategy and is heading into four new markets in Asia and Africa – Vietnam, Myanmar, Nigeria and Angola.