East African Breweries Limited (EABL) has raised its stake in Serengeti Breweries to 72.5 per cent after converting a Sh15.3 billion loan to the Tanzanian subsidiary into equity.
The Nairobi Securities Exchange-listed firm, whose ownership previously stood at 51 per cent, made the transaction to ease the subsidiary’s debt burden. Serengeti’s minority shareholders, who were diluted in the deal, could restore their original 49 per cent stake in the future by ceding half of their dividend entitlement going forward.
“On July 1, 2017, the company entered into an agreement with the non-controlling shareholders of its subsidiary, Serengeti Breweries Limited (SBL), to convert all its outstanding loans receivable to the subsidiary into equity shares, without proportionate capital contribution by the non-controlling shareholders,” EABL says in its latest annual report.
“The transaction resulted in an increase in the effective control of the subsidiary from 51 per cent to 72.5 per cent.”
The transaction came after the brewer reached a settlement with Tanzanian authorities over its acquisition of Serengeti in 2010 for Sh4.9 billion.
No comments:
Post a Comment