October 18, 2011 / 8:16 PM / 7 years ago

EABL gets nod to sell stake in SABMiller's unit

* Kenyan brewer to earn $71.49 mln

* Move will seal formal exit from TBL

* Placement set at $1.212 per share

By Fumbuka Ng’wanakilala

DAR ES SALAAM, Oct 18 (Reuters) - Tanzania’s stock market regulator has approved the sale of East African Breweries Ltd’s (EABL.NR) 20 percent stake in SABMiller’s SAB.L Tanzanian unit for 121.5 billion shillings ($71.5 million), brokers said on Tuesday.

Subscriptions to the placement of 58,985,693 shares in Tanzania Breweries Limited TBL.TZ run from Oct. 24 to Nov. 11, said Orbit Securities, sponsoring broker for the share sale.

“The Capital Markets and Securities Authority (CMSA) approved the prospectus yesterday and the share sale will start on Monday next week,” Orbit Chief Executive Laurean Malauri told Reuters.

“EABL is selling its 20 percent stake in TBL for 121.5 billion shillings ... this is a placement of shares, a few shares of TBL are already listed on the Dar es Salaam Stock Exchange (DSE).”

Controlled by Britain’s Diageo (DGE.L), EABL has set a price of 2,060 shillings per share, in what is expected to become the biggest share sale in the tiny Tanzanian bourse’s history.

EABL ended a manufacturing and distribution agreement with TBL last year to buy a bigger stake in Tanzanian-based Serengeti Breweries instead and thereby boost its presence in East Africa’s second-largest economy.

Serengeti, the second-biggest beer maker in Tanzania after TBL, is owned by a group of private investors.

“EABL is not raising capital or anything in the sale of the shares, it is simply exiting from TBL,” said Malauri.

SABMiller and EABL have been in fierce competition for the lucrative Tanzanian beer market where sustained economic and population growth are driving the country’s thirst for the alcoholic beverage.

Brokers said TBL’s shares recorded a sharp price rise last week from 1,920 shillings to 2,040 shillings, as investors eye the placement of the additional shares.

“TBL’s share price increase may have been driven by investors who want to take advantage of the coming mini IPO whereby the shares will be sold at a premium of up to 15 percent of the market price,” Tanzania Securities Limited (TSL), a securities brokerage and investment advisory company, said in a weekly commentary sent to Reuters.

Another major player in the DSE, Tanzania’s Precision Air, launched its IPO this month in a bid to raise around $17 million for fleet and route expansion. ($1 = 1699.500 Tanzanian Shillings) (Reporting by Fumbuka Ng’wanakilala, editing by Yara Bayoumy and Matthew Lewis)

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