A section of the East African Breweries Limited plant in Ruaraka, Nairobi. FILE PHOTO | NMG
Beer maker EABL is
set to significantly raise its stake in Tanzanian subsidiary Serengeti
Breweries by converting a Sh15.3 billion loan into shares.
The
firm, listed on the Nairobi Securities Exchange-listed, and which
currently holds a 51 per cent interest in the unit, has made the
disclosure in its latest annual report.
Serengeti’s
market valuation is not disclosed, but the huge equity injection could
either suggest a complete takeover or a requirement by the minority
shareholders to also inject fresh capital into the business.
The
proposed transaction, scheduled to be completed in the current
financial year, comes after the East African Breweries (EABL) reached a
settlement with Tanzanian authorities over acquisition of Serengeti in
2010 for Sh4.9 billion.
EABL recently paid an
undisclosed fine to Tanzanian regulators who accused the company of not
growing Serengeti’s business as per the agreed takeover terms.
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