Consolidated Breweries Plc has completed the sale of 513,000,000 ordinary shares of 50 kobo each in Champion Breweries Plc to The Raysun Nigeria Limited, a wholly owned subsidiary of Heineken International BV.
The conclusion of the sale followed its approval by the Securities and Exchange Commission and the Nigerian Stock Exchange (NSE).
Managing Director of Consolidated Breweries, Mr. Boudewijn Haarsma said the shares were successfully crossed to Raysun on the floor of the NSE on Tuesday.
As a result, Raysun now owns a 57 per cent equity stake in the total issued share capital of Champion Breweries. The shareholders of Consolidated Breweries had previously approved the transaction at Consolidated Breweries' Extraordinary General Meeting held last year.
Addressing the shareholders, Chairperson of Consolidated Breweries, Prof. Oyinade Odutola-Olurin, said the sale of the shares would reduce company's exposure to Champion Breweries' debt balance and eliminate the losses from Champion Breweries' operations that were merged with Consolidated Breweries group's financial performance.
"Champion Breweries has recorded losses over the years and has relied on financing from Consolidated Breweries in the form of inter-company debt. The associated interest burden of the intercompany debts on Champion Breweries has negatively impacted its profitability," she said.
According to her, Champion Breweries' losses, coupled with the high cost of financing the company's operations, have in turn, negatively impacted Consolidated Breweries' earnings.
She therefore, noted that it was is in the best interest of both parties for the company to be owned by Raysun, where Champion Breweries' financing and restructuring needs can be more adequately met.
Odutola-Olurin stressed that the sale would further optimise Consolidated Breweries' operations by reducing excess production capacity, which it no longer needed for its own brands and directly aligned Champion Breweries with Heineken, via ownership by Raysun, thereby assuring of a clear focus on Champion Breweries' turnaround.
While Consolidated Breweries is not listed on the NSE, Champion Breweries is listed. The company posted one of the best growth last year, rising by 307 per cent to give its investors reasons to smile. However, profit taking has been affecting the share price of the company this year. It has declined by 14.19 per cent so far this year. That is the highest decline recorded in the breweries sector.