Vijay Mallya, who owes creditor banks more than $1 billion, could be most likely asked by Heineken is to step down from the board of United Breweries, reported Reuters quoting sources.
United Breweries is India's largest brewer.
Betting on a small but fast-growing beer market – India, the move would likely be a prelude to the Dutch drinks firm raising its stake in the maker of Kingfisher beer to above 50 percent, Reuters added quoting the same sources.
Heineken increased its holding to 42.4 percent in United Breweries through its takeover of Scottish & Newcastle which allowed it to acquire a 37.5 percent stake in United Breweries in 2008. This could be a timely grab by Heineken in a market that is growing much faster than the global average with Mallya distracted by debts from a collapsed airline venture.
Rapid urbanisation and a rising middle class are changing consumer habits in India even as two-thirds of Indians don't drink alcohol, often for religious or cultural reasons. It is expected that the Indian beer market would outpace the global average, and major markets like China through 2019 in terms of annual volume growth even increase its present 13 percent share of the of world beer consumption.
Heineken was considering asking Mallya to step down from the United Breweries board he chairs sources said. Mallya could also be tried to be ousted through voting of a shareholder meeting which the company plans to call as an alternative measure.
The sources asked not to be named due to the sensitivity of the matter.
Comments on reports of any move to tighten control over the Indian joint venture were declined by a Heineken spokesman. However the spokesperson said that India remains an "exciting opportunity" for growth given its demographics and strong economic fundamentals.
Mallya and a spokesman for UB Group did not respond to emailed requests for comment.
Mallya who inherited United Breweries at the age of 28 and led it on an ambitious expansion is being hounded by Indian banks and regulators.
Mallya, whose Kingfisher Airlines collapsed in 2013 leaving unpaid wages and angry creditors, is being chased by Indian banks as the banks themselves are creaking under mountains of bad debt and re under pressure from the government to chase up high profile cases like Mallya’s Kingfisher.
Earlier, Mallya was forced to give up controlling shares of United Spirits which is a part of his UB Group to Diageo. Diageo now owns about 55 percent of the company. Receiving a $75 million pay off, Mallya stepped down from the board last month. The lenders to Kingfisher Airlines set on auction the company's Mumbai headquarters on Thursday.
As banks sought a court order to confiscate his passport, Mallya left India early this month and has not disclosed his whereabouts. He is not an "absconder" and would comply with Indian law, Mallya has however said through his Twitter handle.
India's ineffective bankruptcy and debt recovery processes and the often close ties between politics and business are highlighted by the collapse of Kingfisher Airlines and the vast unpaid bank dues.
Mallya is known as the "King of Good Times" for his party lifestyle and is a member of India's upper house of parliament. He is often described as India's answer to British entrepreneur Richard Branson.
(Source:www.reuters.com)
United Breweries is India's largest brewer.
Betting on a small but fast-growing beer market – India, the move would likely be a prelude to the Dutch drinks firm raising its stake in the maker of Kingfisher beer to above 50 percent, Reuters added quoting the same sources.
Heineken increased its holding to 42.4 percent in United Breweries through its takeover of Scottish & Newcastle which allowed it to acquire a 37.5 percent stake in United Breweries in 2008. This could be a timely grab by Heineken in a market that is growing much faster than the global average with Mallya distracted by debts from a collapsed airline venture.
Rapid urbanisation and a rising middle class are changing consumer habits in India even as two-thirds of Indians don't drink alcohol, often for religious or cultural reasons. It is expected that the Indian beer market would outpace the global average, and major markets like China through 2019 in terms of annual volume growth even increase its present 13 percent share of the of world beer consumption.
Heineken was considering asking Mallya to step down from the United Breweries board he chairs sources said. Mallya could also be tried to be ousted through voting of a shareholder meeting which the company plans to call as an alternative measure.
The sources asked not to be named due to the sensitivity of the matter.
Comments on reports of any move to tighten control over the Indian joint venture were declined by a Heineken spokesman. However the spokesperson said that India remains an "exciting opportunity" for growth given its demographics and strong economic fundamentals.
Mallya and a spokesman for UB Group did not respond to emailed requests for comment.
Mallya who inherited United Breweries at the age of 28 and led it on an ambitious expansion is being hounded by Indian banks and regulators.
Mallya, whose Kingfisher Airlines collapsed in 2013 leaving unpaid wages and angry creditors, is being chased by Indian banks as the banks themselves are creaking under mountains of bad debt and re under pressure from the government to chase up high profile cases like Mallya’s Kingfisher.
Earlier, Mallya was forced to give up controlling shares of United Spirits which is a part of his UB Group to Diageo. Diageo now owns about 55 percent of the company. Receiving a $75 million pay off, Mallya stepped down from the board last month. The lenders to Kingfisher Airlines set on auction the company's Mumbai headquarters on Thursday.
As banks sought a court order to confiscate his passport, Mallya left India early this month and has not disclosed his whereabouts. He is not an "absconder" and would comply with Indian law, Mallya has however said through his Twitter handle.
India's ineffective bankruptcy and debt recovery processes and the often close ties between politics and business are highlighted by the collapse of Kingfisher Airlines and the vast unpaid bank dues.
Mallya is known as the "King of Good Times" for his party lifestyle and is a member of India's upper house of parliament. He is often described as India's answer to British entrepreneur Richard Branson.
(Source:www.reuters.com)
