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Business News/ Companies / United Spirits gets shareholders’ nod to be guarantor for loan by subsidiary
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United Spirits gets shareholders’ nod to be guarantor for loan by subsidiary

As many as 99.5% of votes polled were in favour of the resolution, says United Spirits

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New Delhi: United Spirits Ltd (USL) on Monday said it has received shareholders’ nod to issue a guarantee to a bank for loan of up to 100 crore to be availed by its subsidiary Pioneer Distillers.

In a filing to the National Stock Exchange of India Ltd, USL said the resolution for consent approval of the shareholders to give guarantee and/or provide security for a bank loan of up to 100 crore to be availed by its subsidiary Pioneer Distillers Ltd from Standard Chartered or such other banks, was passed with a majority.

As many as 99.5% of votes polled were in favour of the resolution, the firm said. Last month, Diageo-owned USL sought approval from its shareholders to report sick to Board for Industrial and Financial Reconstruction (BIFR) as its accumulated losses as on 31 March 86% of peak net worth during the past four fiscal years.

As per the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), if the accumulated losses of a company at the end of any financial year have resulted in erosion of 50% or more of its peak net worth during the preceding four financial years, such firm is required to report to the BIFR.

In a notice to shareholders for an extraordinary general meeting on 22 January, USL said that as per the audited annual accounts for the fiscal ended 31 March, “the accumulated losses of the company as at 31 March 2015 is 86% of its peak net worth during the four financial years preceding the financial year ended 31 March 2015".

“Accordingly, this extraordinary general meeting is being convened to consider and approve the enclosed report of the board of directors on such erosion and its causes, and the measures being taken as per the relevant provisions of SICA, and also to approve the reporting of such erosion to BIFR in terms of Section 23 of SICA," it added.

The company said its accumulated losses as on 31 March at 5,045.45 crore is greater than 50% of the peak net worth in the immediately preceding four financial years at 5,849.62 crore. PTI

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Published: 12 Jan 2016, 12:25 AM IST
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