Srei Infrastructure to Sell United Spirits Shares to Diageo

Srei Infrastructure Finance Ltd., an Indian lender to road and power projects, plans to sell shares of United Spirits Ltd. it got as collateral for lending to Kingfisher Airlines Ltd. to Diageo Plc.

Diageo on Nov. 9 said it will buy a controlling stake in United Spirits for $2.04 billion. The maker of Johnny Walker whiskey said it will acquire 27.4 percent of India’s largest distiller at 1,440 rupees a share and will make a tender offer for 26 percent of the balance.

Once the regulators approve the transaction “then we get our money from Diageo,” Srei Vice Chairman Sunil Kanoria said in an interview on Feb. 7. “We get our money, we go home.”

Srei acquired 4.9 million shares of United Spirits after buying a 4.4 billion-rupee ($82 million) loan advanced to grounded carrier Kingfisher Airlines by ICICI Bank Ltd. United Spirits shares have risen 41 percent since Nov. 9 and are trading 33 percent higher than Diageo’s offer price. Kanoria didn’t explain why he isn’t selling at the market rate that values Srei’s stake higher at 9.3 billion rupees.

The Kolkata-based Srei had also lent about 700 million rupees to Kingfisher, Kanoria said in the interview.

To contact the reporter on this story: Pradipta Mukherjee in Kolkata at pmukherjee7@bloomberg.net

To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net

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