EABL SET TO UP ITS SERENGETI BREWERIES STAKE BY TURNING $148 MILLION LOAN INTO SHARES

September 1, 2017 - 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.

Business Daily