Whyte & Mackay, the Scotch whisky group, is to be sold off by its parent group, Bangalore-based United Spirits.

United Spirits, a division of Vijay Mallya’s United Breweries, paid £595m for the Glasgow-based distiller at the peak of the market in May 2007.

Having acknowledged that there will be few takers for a minority 49% stake in Whyte & Mackay — as earlier planned — Mallya is now looking to sell the whole company, based in Glasgow’s St Vincent Street.

He is also considering this and other asset and equity stake sales as he struggles to deleverage United Breweries’ tattered balance sheet.

Mallya’s global business empire, which also includes the Kingfisher airline, became over-stretched as a result of a string of highly priced deals at the height of the credit markets.

John Wakely, of corporate finance firm The Angel’s Share, said that only one of several companies that looked at Whyte & Mackay in 2006-07 was still in a position to make a second bid, and that is William Grant & Sons.

However a source at William Grant said the company now had “no interest in acquiring Whyte & Mackay”. This is partly because it has increased its distilling capacity by opening a new distillery in Girvan.

According to industry sources, the only company that may have the appetite for a takeover of Whyte & Mackay is French drinks firm La Martiniquaise.

One analyst said: “If La Martiniquaise was to buy it, it wouldn’t want it for the brands but for the production capacity. It was planning to build new distillery at a site near Bathgate. It’s possible it would scrap those plans and instead buy Whyte & Mackay.”

He added that Mallya would be lucky to raise more than £200m from a sale of Whyte & Mackay. This is because of the paucity of potential buyers, the absence of private equity bidders and because the price of bulk Scotch is expected to fall by 15%-20% in the next few years.

Another bulk whisky producer, Burn Stewart, is also on the market at the moment, which is likely to further deflate the value of Whyte & Mackay.

Burn Stewart is being sold because its parent company, the troubled conglomerate CL Financial, got into financial difficulties and was rescued by the Trinidadian government last month. Wakely said: “This effectively means you’ve got two bulk Scotch whisky businesses on the market, which doesn’t do anything for prices.”

Wakeley said that companies including UB, CL and French vodka maker Belvedere (currently in Chapter 11 bankruptcy) were “learning that leverage can go both ways.”

He added: “Mallya is exploring every option and none of the options is necessarily easy. It would be impossible for him to get £595m.”

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