Bangalore: United Breweries (UB) is considering to lift around Rs 425 crore through a rights issue for providing financial support to its capacity development and upgradation plans. The final decision in this regard was taken at the company’s board meeting on September 27, 2007.

The two major stockholders chairman Vijay Mallya and UK brewer Scottish & Newcastle will take part in the rights issue compliant with their shareholding patterns.

Mr. Vijay and S&N possess 37.5% stake each in the company, which makes up 48% share of India’s beer consumption.

The details of the issue, comprising pricing, will be declared shortly. The rights issue clear up is part of UB’s Rs 1,200-crore capacity enhancement drive by the next three years (2010). This will be funded through equity and debt mix.

While lecturing at the company AGM on Friday, UB chairman Mr. Mallya stated that the expansion drive will aid the company developing its past lead in the beer market.

“We have a 15% lead over our nearest competition SABMiller in terms of market share. The expansion along with investments behind Kingfisher brand will strengthen our competitive advantage against MNC brewers who are already here or who are proposing to come in,” Mr. Mallya added.

In FY’07, UB registered healthy double digit growth in its income and volume as Indian beer consumption is on a developing curve on the back of rising economic system and changing lifestyles.