United Spirits bottler Pearl Distillery raises structured debt
March 27, 2018. Vccircle

Liquor maker Pearl Distillery Ltd, an exclusive bottler and franchisee partner of Diageo Plc-controlled United Spirits Ltd, has raised structured debt from a non-banking financial company, a person privy to the development said.

The company has mopped up Rs 200 crore ($30.4 million) from one of the NBFC units of JM Financial Ltd, the person said. Pearl will use the funds to repay its secured and unsecured loans, meet its working capital and capital expenditure requirements, the person added.

Incorporated in 1973, the company's distillery is located at Singarayakonda in Prakasam district of Andhra Pradesh. The company makes whisky and brandy for United Spirits under brands such as McDowell's and Director's Special.

The company reported operating income of Rs 669 crore and profit after tax of Rs 2.73 crore on a provisional basis for the year through March 2017, according to a December 2017 report by credit rating firm CRISIL.

The report said that rising demand and a shortage in supply of liquor in Andhra Pradesh after the state split into two will help the company increase revenue in the medium term.

Mid-market investment bank Veda Corporate Advisors advised Pearl Distillery on the transaction.

A number of companies have raised structured debt in recent months. In March, marketing services firm Ad2Pro mobilised Rs 63 crore in structured debt from Avendus.

In January, educational coaching services provider Rao Edusolutions Pvt. Ltd, which operates under the brand name Rao IIT Academy, raised structured debt worth Rs 55 crore from Avendus Finance, the credit solutions arm of Avendus Capital.