Vijay Mallya’s UB Group to infuse $2 mn in US brewer
26 Nov 2013 4:20 AM IST
Liquor baron Vijay Mallya-led UB Group has decided to infuse $2 million in Mendocino Brewing Company, a US-based loss making firm, to revive its fortunes. UB has also agreed to ‘favourably consider additional investment to underpin growth based on detailed business plan to be submitted in due course’ by Mendocino, it said in a regulatory filing.
UB's readiness to invest in the US firm comes even as the group's Kingfisher Airlines in India remains grounded for over a year due to severe financial problems.
Mendocino Brewing Company (MBC), in which United Breweries Holdings Ltd (UBHL) holds a 68.1 per cent stake while another group firm United Breweries of America has 24.5 per cent, has exclusive licence to brew and distribute Kingfisher Premium Lager beer in certain foreign markets.
UBHL is also the holding company of all the listed entities of the UB Group, including Kingfisher.
According to Mendocino's regulatory filing with the US markets regulator SEC, UBHL has agreed ‘to commit an initial funding of $2 million in four half yearly instalments with the first instalment to be remitted expeditiously’.
The investment is being made to ‘protect and enhance the value of its existing investments in MBC’, the company said.
As on 30 September, 2013, Mendocino had $40,700 in cash, an accumulated deficit of $14.27 million and a working capital gap of $7.2 million due to losses incurred and reclassification of debts owing to a US-based bank as a result of the event of default. The firm slipped into losses during the July-September quarter, as against a slim profit in the year-ago period.
With the company battling multiple problems, it approached its majority shareholder UBHL for financial help.
UB's readiness to invest in the US firm comes even as the group's Kingfisher Airlines in India remains grounded for over a year due to severe financial problems.
Mendocino Brewing Company (MBC), in which United Breweries Holdings Ltd (UBHL) holds a 68.1 per cent stake while another group firm United Breweries of America has 24.5 per cent, has exclusive licence to brew and distribute Kingfisher Premium Lager beer in certain foreign markets.
UBHL is also the holding company of all the listed entities of the UB Group, including Kingfisher.
According to Mendocino's regulatory filing with the US markets regulator SEC, UBHL has agreed ‘to commit an initial funding of $2 million in four half yearly instalments with the first instalment to be remitted expeditiously’.
The investment is being made to ‘protect and enhance the value of its existing investments in MBC’, the company said.
As on 30 September, 2013, Mendocino had $40,700 in cash, an accumulated deficit of $14.27 million and a working capital gap of $7.2 million due to losses incurred and reclassification of debts owing to a US-based bank as a result of the event of default. The firm slipped into losses during the July-September quarter, as against a slim profit in the year-ago period.
With the company battling multiple problems, it approached its majority shareholder UBHL for financial help.
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