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the petitions, it said.
The UBHL may appeal against the order before the Supreme Court. "We will take all necessary steps to protect Diageo’s interests as well as our own," Mallya said in response to the court’s ruling.
A Diageo spokesperson said, “We are awaiting receipt of the detailed written order of the division bench. We do not believe that there are any grounds for declaring the sale of the 10,141,437 shares in United Spirits Limited purchased by Diageo on July 4, 2013, from United Breweries (Holdings) Limited (UBHL) as void. We are disappointed to hear that the court has over-ruled the previous order of the High Court of Karnataka granting leave to UBHL under sections 536 and 537 of the Indian Companies Act in respect of the five winding up petitions then pending against UBHL to enable the sale of the USL shares by UBHL to take place. We are also disappointed, as a bona fide purchaser for value of the USL shares, that we have been brought into the private dispute between Kingfisher Airlines and its creditors. Once we receive the full written order of the Court of Appeal, we will review the detail of that order. We confirm that we intend to appeal the matter further.”
Analysts maintained that the deal would not come apart as some arrangement is likely to be worked out between Mallya and Diageo. “At its worst this will result in Diageo’s stake coming down in USL. We feel something will be worked out and don’t see any threat to the deal," said V Srinivasan, research analyst at Angel Broking. According to the arrangement between Mallya and Diageo, in the event of the latter not having majority control in USL, UBHL would vote its remaining shareholding in USL as directed by Diageo for a period of four years.
The creditors who moved the appeal before high court included BNP Paribas, Rolls Royce and Partners Finance, RRPF Engine Leasing and IAE International Aero Engines, who were aircraft lessors and financiers to Kingfisher Airlines. The company court had last month admitted two of the winding-up petitions, by French bank BNP Paribas and aircraft manufacturer ATR, and allowed newspapers advertisements to be published.
The USL share closed up 0.97% higher at Rs 2670.55 on the BSE on Friday. The order came after trading hours.