Provisions crush United Spirits' earnings as FY14 loss balloons to Rs 4,489 crore

Last Updated: Thu, Sep 04, 2014 10:31 hrs
United Spirits

United Spirits, which finally came out with its earnings after much delay and four Board meetings, has posted a net loss of Rs 4,489 crore for FY14 as compared to a net loss of Rs 105 crore during FY13 as it was forced to provide as much as Rs 3,235 crore on the sale of its Scottish subsidiary - Whyte & Mackay.
The net sales was static at Rs 10,500 crore.  

The company, in which global spirits major Diageo is a majority shareholder, has been forced to provide provisions for various  loans to UB Group companies.

United Spirits has further added that as much as close to Rs 350 crore has been provisioned in lieu of the Rs 1,450 crore loans provided to UB Group holding company - UB Holdings. In addition to this, USL has been forced to provide an additional Rs 600 crore, which are due to the company from various of business associates and which are under dispute.  
USL shares lost close to 8% in morning trade on the NSE and are trading at Rs 2,275 per share.

# Net loss zooms to Rs 4,489 crore during FY14 vs loss of Rs 105 crore in FY13
# USL has been forced to make provision of Rs 3,235 crore on sale of Whyte & Mackay as the proceeds were not enough to service intra-group loans
# As Diageo, which holds 54% in USL, makes sweeping changes in tightening the financial discipline, USL has been forced to provide an additional Rs 1,000 crore on loans provided to UB Group companies and business associates
# USL authorises its newly appointed Managing Director Anand Kripalu to take all active measures to recover the loans of as much as Rs 2,000 crore provided to UB Group and business associates
# One of the lenders to Kingfisher Airlines springs a surprise to USL Board that USL has furnished a guarantee for Rs 200 crore to the airline. The management denies any knowledge of this and are contesting this as well

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