Diageo had purchased the shares amounting to 6.98 per cent stake in USL from UBHL as part the USD 3 billion deal in 2012 through which it had gained majority control in the Indian spirits maker.

The share sale was, however, challenged in the courts by lenders to UBHL, which had defaulted on loans.
"...adverse results for Diageo in the proceedings … could, absent leave or relief in other proceedings, ultimately result in Diageo losing title to the 1,01,41,437 USL shares acquired from UBHL," Diageo informed shareholders in its annual report of 2015.
Based on the current share price of USL at Rs 3,193.35 apiece, the 6.98 percent stake is worth Rs 3,238.51 crore.
Diageo, which is the majority shareholder in USL with a 54.78 percent stake, however, added that it would continue to be in control of USL even if it were to lose the title of the over one crore shares.
"Diageo believes it would remain in control of USL and be able to consolidate USL as a subsidiary regardless of the outcome of this litigation," the company said.
Diageo, under a share purchase agreement (SPA) with UBHL and various other sellers, had acquired 21,767,749 shares (14.98 percent) in USL for a total consideration of Rs 3,130 crore, including the 1,01,41,437 shares from UBHL.

Latest News  from Business News Desk