INDIA – Khetan Group, a partner of Carlsberg in the Indian and Nepalese holding company Carlsberg South Asia Pte Ltd (CSAPL), has put a formal notice to sell its entire stake of 33% to the Danish brewer for US$744 million (Rs 6100 crore).
In its full-year global earnings statement for 2022 which the brewer reported revenue growth of 16.9%, Carlsberg said: “The put option valuation process related to our partner’s 33% holding in the Indian and Nepalese holding company Carlsberg South Asia Pte Ltd (CSAPL) has been concluded. “
“The partner has issued a formal put notice to sell his 33% shareholding in CSAPL to the group at the put option valuation amount of USD 744m. Consequently, the supervisory board has decided not to initiate a new share buy-back program this quarter.”
The company explained that for several years; it has had serious disagreements about the Shareholders’ Agreement between Carlsberg and its partner CSAPL Holdings Pte Ltd (CSAPLH) concerning Carlsberg South Asia Pte Ltd (CSAPL), the holding company for the businesses in India (100%) and Nepal (90%).
Carlsberg, which owns two-thirds of the holding firm and the rest by CSAPLH, had a boardroom battle with Khetan Group after concerns from its auditor over financial irregularities, including incorrect payments, embezzlement, and kickbacks from customers.
At the request of CSAPLH, according to ET Retail, the disagreements were referred to arbitration in Singapore and a liability award was issued by the arbitration tribunal in May last year.
The tribunal awarded Carlsberg the right to call CSAPLH’s shares in CSAPL. The put option valuation was released by the valuers on 6 February 2023, stating a value for CSAPLH’s shares in CSAPL of $744 million.
The owner of the Tuborg beer brand said the partner had previously asked for an unreasonably high amount for its shareholding.
In the financial results, the Copenhagen-based company said the put option liability recognized in the consolidated financial statements has been adjusted to reflect the put option valuation amount received from the valuers as the acquisition of the shares may be completed at that price.
The is slated to complete in 2023, subject to the clarification of any disputes raised by the shareholders and timelines for any regulatory approvals.
Carlsberg further noted that the company will work with its external advisors to evaluate its position and assess whether CSAPLH has committed additional breaches of the Shareholders’ Agreement, which would justify further legal steps against CSAPLH.
Meanwhile, the brewer expects to have found a buyer for its business in Russia and signed an agreement by June, according to Reuters. However, the company is seeking an option to buy back the business in the future.
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