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Friday 24 October 2014

United Spirits delays results again

5th August, 2014 by Neal Baker

United Spirits has once again delayed publishing its full-year performance results, citing as its reason the need to clarify financial concerns raised by its own audit committee.

India Economic Summit 2008

Industry insiders see the delay as being related to massive internal loans involving USL and other UB Group companies under chairman Vijay Mallya (Photo: Wikipedia)

United Spirits, which was recently taken over by Diageo for £1.1 billion, issued a filing to the Bombay Stock Exchange claiming its audit committee was seeking “certain clarifications and information” before it could announce its results.

According to Business Standard, the reason behind USL’s delay relates to its inability to explain loans of around 1,400 crore (about £140m ) to parent company UB Holdings, during which time billionaire Vijay Mallya was leading the group.

It is thought that this massive loan was used to prop up the failing UB Group company Kingfisher Airlines, which is has now been grounded since 2012 due to defaults in payments.

The group was due to publish its financial results on Friday 1 August following two previous delays. USL has also delayed reporting its fourth quarter results due to issues surrounding its sale of the Whyte & Mackay whisky firm to Emperador.

Industry experts following the USL acquisition by Diageo have been wary of the risks of high write-offs, including a likely write-down of inventories and a longer-than-expected period for working capital improvement, according to Business Standard.

Diageo, the world’s largest drinks group, has been attempting to clean up USL’s balance sheet since it acquired a 55% majority shareholding in June 2014.

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