Mallya’s craft beer firm brews fresh funding in US
Away from the furore over huge loan default in India by Vijay Mallya-led UB Group, its US-based brewery arm has secured a complex funding that it intends to repay later with a 'bridge loan' from its parent. California-based Mendocino Brewing Company, which sells a number of beer brands including Kingfisher in the US, has got Mallya as its Chairman and is owned by UB Group through a complex shareholding structure.
In a regulatory filing with the US markets regulator SEC (Securities and Exchange Commission), Mendocino has disclosed having issued a 'promissory note' to Delaware-based Catamaran Services, Inc, in the principal amount of $325,000 (over Rs 2 crore).
It further said Mendocino had earlier also issued four promissory notes to Catamaran between January 2014 and June 2015, for principal amounts of $500,000 each. Catamaran's sole shareholder is an entity named Catamaran Holdings, Ltd, which interestingly "has directors in common with Inversiones Mirabel SA", one of the major shareholders of Mendocino.
The indirect beneficial owner of Inversiones is United Breweries Holdings Limited (UBHL), making UBHL the indirect majority shareholder of Mendocino. Mallya chairs the boards of UBHL as well as Mendocino. Mendocino further said it has also received a letter from Illinois-based MB Financial Bank permitting the company to obtain loans up to $400,000. As per the terms of the promissory note, Mendocino has promised to pay the principal sum of $325,000 with accrued interest to Catamaran within 6 months, subject to the receipt by the company of a bridge loan from its majority shareholder. This repayment is subject to the shareholder loan amount being sufficient either to pay the note through 'Permitted Payments', or to pay both the note and certain existing obligations of the company to MB Financial Bank.
The 'Permitted Payments' on the note are payments made from the portion of a Shareholder Loan that is in excess of $600,000, the filing further said. If the company is not able to satisfy its obligations on the note within six months, the note will get automatically extended for additional six months terms "until a Shareholder Loan sufficient to satisfy the note is received or the note is otherwise paid."