Ghana: Guinness Ghana Breweries launches GHS180 mln renounceable rights issue

Guinness Ghana Breweries Limited ("GGBL"), Ghana’s leading beverage company, has launched a GHS180 million renounceable rights issue in order to retire part of its debt, optimise its capital structure and improve its financial and operational flexibility.

The objective of the transaction is to return GGBL to an optimal capital structure, reduce the interest burden on GGBL, provide GGBL with the financial flexibility to invest in future value-creating opportunities and return GGBL to a position where it can pay dividends.

Following the Rights Issue of GHS 70,000,000 in November 2011, the company successfully reduced its outstanding net debt from GHS 104,907,000 as at June 2011 to GHS 5,626,000 as at June 2012.

However, over the past 3 years, the GGBL has invested significantly in capital expenditure including increasing the capacity of the Kumasi brewery, installing spirits blending and bottling capability and redesigning the Malta Guinness bottle. These operational initiatives have been funded primarily by debt.

Francis Agbonlahor, Managing Director of GGBL said “The macroeconomic backdrop has increased the burden of the debt financing with market interest rates having increased significantly, as well as putting pressure on the operating performance of the business.

We are however confident the injection of GHC180m will give shareholders the opportunity to contribute to GGBL's future while enabling the company to reduce its debt levels, increase its profitability and enable us maintain the leading position in Ghana.”

The Offer is open from 6th May 2016 until 3:00pm on 31st May 2016. IC Securities (Ghana) Limited is acting as the Financial Advisor and Sponsoring Broker to GGBL in respect of the Offer and can address any technical questions regarding the Rights Issue process.

11 May, 2016