United Breweries raises 1 m pound loan from Heineken
New Delhi: Vijay Mallya-led UB group has inked a loan agreement for 1 million pounds with Heineken along with a brewing pact, under which if the Indian partner defaulted in payment the Dutch firm would gain rights to produce and sell Kingfisher beer in the UK for five years.
The loan and brewing agreements were signed between Kingfisher Beer Europe Ltd (KBEL), subsidiary of United Breweries International Ltd, UK (UBIUK) and Heineken UK Ltd. “On April 18, 2013, KBEL entered into a loan agreement with Heineken pursuant to which Heineken agreed to provide KBEL with a secured term loan facility of £10,00,000 to be made available...on October 9, 2013 and to be repaid in full by October 9, 2016,” a statement by Heineken said.
The company further said: “The brewing agreement will grant Heineken the exclusive right to manufacture, package and supply Kingfisher Beer for sale in the United Kingdom and to manufacture a package Kingfisher beer for export by KBEL to Europe (excluding Germany) for a period of five years.”
In addition, in exchange for royalty payments to KBEL, Heineken will receive the right to the sole and exclusive reseller of the product to certain customers, it added. As per the agreement, if KBEL defaulted in the repayment of the loan, “Heineken has the option...to acquire an exclusive licence from UBIUK to produce, market and sell the product in the UK”.