SEC okays Consolidated Breweries’ stake in Champion Breweries
January 5, 2011
THE Securities and Exchange Commission (SEC) has approved Consolidated Breweries Plc’s majority shareholding in Champion Breweries Plc.
The acquisition, which took effect from January 3, 2012, will however, not result in a full merger of Champion Breweries into Consolidated Breweries’ existing business.
Under the arrangement, Champion Breweries will retain its identity, independence, board and management team, “but will be managed with the active involvement of Consolidated Breweries Plc”.
Though silent on the present ownership structure, Consolidated Breweries explained yesterday, that as a result of the transaction, Champion Breweries will have “good opportunities arising from this partnership.”
The company added: “The transaction will amongst other things provide an even better avenue for the further development of the Champion Lager Beer brand, access to expertise, synergies in all functional fields and, not least important, increase the capacity utilisation of its brewery through possible manufacturing of Consolidated Breweries Plc’s brands in the future.
“On the other hand, Consolidated Breweries will strengthen its position in the value for money segment in Nigeria, by being able to improve the geographic spread of its operations. It will also get instant access to production capacity which will enable the Company to address its current capacity constraints and further strengthen its platform for future growth”.
Explaining further, Consolidated Breweries Plc in a press statement pointed out that the transaction once again confirms the Company’s commitment in playing its role towards the development of the Nigerian beer market.
The board of the company recently secured the approval of all stakeholders to float a total of 99,140,625 ordinary shares of 50 kobo each.
At the end of a completion board meeting held in Lagos, the company explained that the rights issue had already been approved by the company’s shareholders at a recent yearly general meeting.
Under the arrangement, a total of 99,140,625 ordinary shares of 50 kobo each will be offered to existing shareholders in the ratio of one new ordinary share for every four ordinary shares held as at 23 December 2011, at 62.00 per share.
The company said it approvals for the registration of the new shares have already been obtained from SEC.
Stanbic IBTC Bank Plc is the Issuing House to the issue, which is expected to open on Monday, January 9, 2012 and close February 15, 2012.
At the completion board meeting, the company told stakeholders that the proceeds of the issue will be applied towards refinancing some of Consolidated Breweries’ existing bank facilities, provide additional working capital and funding for the upgrade of production and distribution facilities to achieve capacity expansion and efficiency.