GBL Posts ?3.8bn Profit In First Quarter

GHANA Breweries Limited (GBL) has made a net profit of ?3.85billion within the first quarter of this year.

This remarkable feat will ensure that shareholders start enjoying dividends in the very near future.

This was contained in a circular to shareholders on the issuance of the additional shares as part of the capital restructuring exercise.

As part of the restructuring of the capital structure, there is an issuance of 28,666,403 ordinary shares to Heineken International B.V. as a consideration for the conversion of the ?10.7 billion zero coupon convertible bond into equity; a renounceable rights offering of 230,338,484 ordinary shares of no par value at ?460 per share of four new shares for every one existing share; a conversion of part of Social Security and National Insurance Trust's (SSNIT) preference shares into ordinary shares and a write-off of the deficit on the income surplus account through a reduction of stated capital.

GBL's prospects have improved significantly as a result of prudent management in the recent past combined with a calculated rationalisation of the company's brand portfolio and improvement in distribution as well as substantial investment in plant and human resources.

The issuance of additional shares has been necessitated by the capital restructuring approved by Shareholders at the Emergency General Meeting held on April 15, 2003.

The capital restructuring is aimed at reducing the dependence on short-term borrowings as well as the deficit on income in the company's surplus account. After the rights issue and capital reduction, part of the outstanding amount on the preference shares will be converted to equity.

It is expected that this will significantly change the shareholding structure, giving SSNIT a participating interest in the ordinary shares of about 17 per cent. SSNIT currently holds 7.09 per cent shares in the company.

The capital restructuring had to be undertaken in view of the unfavourable economic environment that followed the merger of GBL, adversely affected the synergy’s that favoured the merger.

GBL has applied to the Ghana Stock Exchange for all rights shares totalling 230,338, 484 together with the other additional shares to be issued under the capital restructuring exercise for admission on the first official list, alongside 28,918,218 ordinary shared listed.

According to the circular, with increased socio-political stability in the country, coupled with continued positive economic fundamentals and plans for further investments in capital expenditure, GBL is poised to grow its market share in order to maintain market leadership in the lager segment and respectable percentage of the market.

It is also expected that substantial investments in fixed assets will be made to replace obsolete plant and machinery during the forecast period.

The company has projected a turnover to grow at an average of between 1 and 5 per cents per annum for the period 2003 to 2005.

The exercise is likely to result in an increase in the shareholding of Heineken International over an above the Exchange and Control limit of 74 per cent of GBL’s issued s ordinary shares. The necessary approval has already been sought from the Central Bank.