At the
Extra-Ordinary General Meeting of Consolidated Breweries Plc held on the 23rd of August, 2013, shareholders of the company
voted in favor of the Board’s proposal to sell 513,000,000 ordinary shares of
50 kobo each in Champion Breweries Plc held by Consolidated Breweries to The
Raysun Nigeria Limited, a wholly owned Heineken B V subsidiary.
Addressing shareholders
at the meeting which held at Lagoon Restaurant, Victoria Island, Lagos,
Chairman, Consolidated Breweries Plc, Prof (Mrs) Oyinade Odutola-Olurin noted that as part of the sale, Raysun will
be assigned all of the rights to and interests in the debt owed to Consolidated
Breweries by Champion Breweries. The sale, according to her, will reduce
Consolidated Breweries’ exposure to Champion Breweries’ debt balance and
eliminate the losses from Champion Breweries’ operations that are consolidated
with Consolidated Breweries group’s financial performance.
“Champion Breweries has
recorded losses over the years, and has relied on financing from Consolidated
Breweries in the form of intercompany debt.
The associated interest burden of
the intercompany debts on Champion Breweries has negatively impacted its
profitability. Champion Breweries’ losses, coupled with the high cost of
financing Champion Breweries’ operations, have in turn, negatively impacted
Consolidated Breweries’ group earnings. Therefore, it is in the best interest
of Consolidated Breweries and Champion Breweries for the company to now be
owned by Raysun, where Champion Breweries’ financing and restructuring needs
can be more adequately met”, she said.
She added that the sale
will further optimize Consolidated Breweries’ operations by reducing excess
production capacity it no longer needs for its own brands and directly align
Champion Breweries with Heineken, via ownership by Raysun, and thereby assure
clear focus on Champion Breweries’ turnaround.
According to her, the
sale is subject to the approval of the Securities and Exchange Commission
(SEC), as an application will be submitted to SEC for its approval prior to
finalizing the transaction.
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