United Spirits Ltd said on Thursday that it will raise up to $225 million to cut its high-cost loans.

Standard Chartered Bank, Rabo Bank and DBS Bank have been appointed asadvisers to the issue, which is scheduled to take place in early 2012. The funds will be raised through the sale of foreign currency convertible bonds to the extent of $175 million, with a greenshoe option of up to a further $50 million.

File photo of Bottles of United Spirits Ltd.’s Four Seasons wine sit in the shelf at a liquor store in New Delhi. Bloomberg

“This fund raising would result in 50% interest savings," said Ravi Nedungadi, president and chief financial officer of UB Group. The company is proposing to raise the funds at a “single-digit" interest rate and list the bonds on the stock exchange in Singapore, Nedungadi said.

A statement issued to the stock exchanges said the funds will lower high-cost debt and consequently improve profit and earnings per share.

The company won’t use the proceeds of the bond sale to help UB

Group-promoted Kingfisher Airlines Ltd, which has sought more working capital from banks and has cancelled flights owing to a cash crunch.