Champion Breweries Plc has announced plans to increase its capital base by raising fresh funds.

The firm said it was part of its restructuring programme aimed at ensuring that the ailing company was put back on the path of profitability.

A statement by the company on Monday said that the planned recapitalisation was an important element in its turnaround programme.

It quoted the firm’s Acting Chairman, Alhaji Shuaibu Ottan, as saying that the re-financing of its existing debt through debt-to-equity conversion and injection of fresh cash through a rights issue were part of the options being considered as key success factors.

The statement added that the shareholders of the company also urged the management to explore all avenues of turning around the company’s fortune.

He said, “The 2012 trading results continue the negative trend as in the previous years. Efforts must be geared towards resolving the issues surrounding the planned debt re-financing as well as improvement on the utilisation of the installed capacity of the brewery towards positive turnaround of  the company’s performance.

“It is important to note that the Board of Directors has completed all the required processes towards the recapitalisation of the company as efforts are now being made to secure the cooperation and commitment of different shareholder blocks in the re-financing programme.”

The company’s results for the 2012 financial year showed that revenue reduced slightly from N1.791bn in 2011 to N1.785bn, while earnings before interest and tax improved by 2.4 per cent from a loss position of N1.251bn in 2011 to N1.222bn in 2012 on the back of firm cost control in administrative expenses.

The Managing Director, Consolidated Breweries Plc, Mr. Boudewijn Haarsma, who is one of the directors representing the new core investors on the board, expressed optimism in the future of the company, saying the management had stabilised the operating production capacity.

“If the planned investment to increase production capacity is combined with a timely implementation of the re-financing programme by the major shareholders, it is feasible to reach profitability on the short term”, he said.

Source: Punch (by Udeme Ekwere)