Ghana Breweries recorded net loss of 12.6 billion cedis

Ghana Breweries Limited (GBL) recorded a net loss of 12.6 billion cedis compared to an operating profit of 6.4 billion cedis last year.

Mr Martin Eson-Benjamin, Chairman of the Board of Directors of the Breweries, attributed this to the massive exchange losses of 7.2 billion cedis in respect of Euro-denominated debts and an interest burden of 9.4 billion cedis.

Speaking at the extraordinary general meeting of shareholders, he said the exchange losses were attributable to the impact of the 35 per cent depreciation of the cedi against the Euro during the year.

"It is against this background that the approval given by Heineken to fund the company with a fresh equity injection of five million Euro and the conversion of 7.5 million Euro inter-company debt including the 10.6 billion-cedi zero coupon convertible bond is very significant."

This, he said, would reverse the weak capital structure of the company, reduce foreign exchange exposure and eliminate the high interest burden.

"As part of the capital restructuring the Social Security and National Insurance Trust (SSNIT) has also agreed to convert its preference shares valued at 42 billion cedis into ordinary shares."

Mr Eson-Benjamin said the Directors considered it prudent that with fresh capital being injected into the business to reduce financial charges and assist in the financing of capital expenditure, appropriate measures should be taken to ensure reasonable returns to shareholders.

He said that the company had not been able to pay dividends since the merger with the Kumasi Brewery in 1998 due to the huge deficit balance on the income surplus accounts.

This, he said, has made the actual performance of the company fall short of expectations at the time of the merger.