Zambian Breweries completes US$70 million rights offer
Zambian Breweries Plc has successfully completed its Rights Offer aimed at raising US$70 million from the capital market.
Company corporate affairs director Chibamba Kanyama in an interview said the objective of the rights offer issued last month was to increase the Zambian Breweries’ beer production capacity by refurbishing and expanding the Ndola brewery facility due to increased demand for beer.
Mr Kanyama said total capital required for the project is US$90 million, adding that US$20 million will be raised internally and US$70 million from the capital market.
The Rights Offer is the issuing of rights to a company’s existing shareholders to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period.
Zambian Breweries issued 182 million shares that were all fully subscribed.
According to a statement issued by sponsoring broker Pangaea Renaissance Securities Limited, the Rights Offer has achieved the principal objectives for raising the required capital for the purposes of increasing the company’s beer production capacity by refurbishing and expanding the Ndola brewery facility as a result of anticipated increase in demand for beer in Zambia.
SABMiller Africa BV, the company’s majority shareholder, only subscribed for its entitlement in the Rights Offer and did not take up any of the renounced rights or through placement.
"As a result, its shareholding has remained at its pre-Rights Offer levels of 87.13 percent. The shareholder base of the company has, however, been broadened to include several key Zambian institutional investors," notes Pangaea Renaissance Securities.
It adds that Zambian Breweries is encouraged by the strong individual and institutional support and thanked the investing public for their participation in the Rights Offer.
The sponsoring broker has, however,warned the investing public that the share price in listed securities trading on the stock market may fluctuate and investors may not receive the amount invested in any trade of the shares.
This article was originally posted on Africa Agribusiness Platform
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