Consolidated Breweries Plc has received the approval of its shareholders to sell off 57 per cent equity stake in Champion Breweries Plc.

A statement by the company explained that the shareholders gave their approval during an Extraordinary General Meeting organised by Consolidated Breweries on Friday.

The statement said that shareholders of the company gave their approval to the board’s proposal to sell 513 million ordinary shares of 50 kobo each in Champion Breweries Plc to Raysun Nigeria Limited.

Raysun Nigeria is a wholly owned Heineken BV subsidiary.

The Chairman, Consolidated Breweries, Prof. Oyinade Odutola-Olurin, said that as part of the sale, Raysun would be assigned all of the rights to and interests in the debt owed to Consolidated Breweries by Champion Breweries.

She stressed that the sale would reduce Consolidated Breweries’ exposure to Champion Breweries’ debt balance and eliminate the losses from Champion Breweries’ operations that were merged with Consolidated Breweries group’s financial performance.

She said, “Champion Breweries has recorded losses over the years, and has relied on financing from Consolidated Breweries in the form of intercompany debt. The associated interest burden of the intercompany debts on Champion Breweries has negatively impacted its profitability.

“Champion Breweries’ losses, coupled with the high cost of financing Champion Breweries’ operations, have in turn, negatively impacted our group earnings. Therefore, it 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.

According to her, the sale is subject to the approval of the Securities and Exchange Commission, as an application will be submitted to SEC for its approval prior to finalising the transaction.

She had said earlier this year that the company had been involved in strategic investments aimed at building its business sustainably.

She said, “We may still have a few storms to weather but if we press on with our plans, our dreams will culminate in a company in which you will be proud to be a shareholder.

“The simultaneous investments in acquiring breweries with the company’s capacity, while expanding and improving the capacity of its Ijebu-Ode brewery, remained important steps in establishing a platform for the future growth of the company and maintaining its future competitiveness.”

Consolidated Breweries recorded a 20 per cent rise in its revenue at the end of the 2012 financial year, as it rose from N27.9bn in December 2011, to close at N33.5bn.

Source: Punch (by Udeme Ekwere)