Habesha Breweries Sells Shares to Increase Capital

Habesha Breweries S.C sold 66,301 shares on November 16, 2013, at its headquarters located in the Hayahulet Mazoria area, Yeka District. This came following the decision to sell the shares during the company’s eighth extraordinary general assembly meeting on July 6, 2013.

The Company had intended to sell 300,000 new shares to increase its capital to 550 million Br from its current 250 million Br.

Habesha’s existing shareholders were offered the chance to buy 200,000 of the new shares without the premium asked from new shareholders for buying the shares risk-free, according to Yonas Alemu, Marketing & Business Development manager of Habesha.

“They have been with us right from the day the Company first began operating,” said Yonas, explaining that now that the factory is being built, risk has reduced. “They took a risk in buying our shares then.”

After the decision to sell the shares, 127,539 were snapped up by existing shareholders at 1,000 Br a share during the 40 days from July 1, 2013.

However, this left 72,461 unsold shares, which were put up for a bid. Seven bidders submitted their documents up until November 15, 2013.

A current shareholder who bought 100 shares when the Company was setting up shop, however, is not concerned that the offer of the shares to the public would dilute his shares.

“I like looking at the big picture,” he told Fortune, adding that although he was offered 100 shares this time around, he opted not to buy. “Having more shares will mean we have more presence in the economy.”

While existing shareholders could buy just four shares, new shareholders were required to bid for a minimum of 10 shares, for at least 1,000 Br a share.

“We cannot divulge the amount of money offered by the leading bidders or the identity of the winner just yet,” said Eskinder Desta, vice chairman of the Board of Directors. “The Board has to validate the sale before we make an official announcement.”

The Company had no problem setting the price of shares, even though there is an absence of secondary share prices in the country, according to Zewdu Negate, general manager of Habesha’s factory.

“The price of the shares is the same as it was at the beginning of the Company,” Zewedu said. “This is the par value though.”

The income from the sale of the shares is to fund the construction of Habesha’s factory found in Debre Berhan – a town 125km north east of Addis Abeba – which started in September 2013. The factory, located on a 7.5ha plot of land, will have the capacity to produce 500,000 hectolitres a year. Construction, undertaken by Lehui Food Machineries Co Ltd – a contractor from China – and Yerer Construction Plc – a local civil contracting company – is expected to end within a year.

Habesha has 7,800 local shareholders and Bavaria N.V. Brewery – the foreign shareholder which owns 49.9pc of the Company, according to Eskinder, who added no shareholder is allowed to hold more than 50pc of Habesha.

The remaining shares will be put on the market at a later date, Fortune learnt. The Company plans to construct a malt factory in the near future.

Availing two types of beer, Premium and Lager, to the Ethiopian market, as of September, 04, 2014, is in the pipeline, according to Eskinder.

Habesha is set to enter a market that is still undeveloped. Ethiopia’s average annual beer consumption stands at five litres per person, while Kenya’s is 12 litres. According to research by the Kirin Institute in Japan, the Czech Republic tops the list with 131.7 litres a person.

BGI Ethiopia ranks first in the Ethiopian beer market with a 48.25pc market share. The Heineken and Dashen Breweries trail behind as second and third, with an 18.75pc and 18pc, respectively. Diageo Plc comes last with 15pc.


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