South Korea: Carlsberg may sell its remaining shares in Hite Brewery

Danish beer giant, Carlsberg A/S, may sell its remaining shares in South Korea's largest beer maker, Hite Brewery Co., valued at $360 million, and asked the Korean firm to buy them back, a Hite executive told Reuters on Sunday, December 11.

The possible sale comes after the world's sixth-biggest brewer sold around half of its stake in Hite, South Korea's top beer maker, on December 2 in a deal generating net proceeds of about 1.9 billion Danish crowns.

After that sale, Carlsberg's ownership was cut to 13.1 percent, which had a market value of 372.2 billion won based on Friday's closing price.

"With the share price of our company soaring, Carlsberg appears to want to sell them, given its difficult financial situation," the official said by telephone, declining to be named. "We have not decided whether to buy them back or not."

Shares in Hite have climbed 73 percent so far this year, fueled after a consortium led by the company bought top local liquor maker Jinro Ltd. in June. The recent share sale was priced at 142,000 won each, a 4.1 percent discount to Hite's closing price a day earlier, sources close to the matter had said.

At the time, Carlsberg said it would use the proceeds to reduce its debt and invest elsewhere, adding the sale was consistent with its commitment to free up capital from minority positions where there is no clear path to control.

Last month, Carlsberg reported nine-month earnings before interest and tax (EBIT) had fallen 3.3 percent to 2.9 billion Danish crowns, and it surprised with a rise in net debt to 24.3 billion crowns.

"Reducing debt is still very, very high on our agenda," its CFO, Joern Jensen, said at the time.

The Hite official said it was not clear how the relationship between the two companies, which have been in technology alliance over two decades, would develop if Carlsberg sold off its shares.

14 December, 2005