- East African Breweries Plc’s KSh 11 billion ($96.8 million) Medium-Term Note ranked among the top corporate deals done in Africa in 2021
- The Bond and Loans Awards usually recognizes the most innovative and ground-breaking deals from Sovereign, Corporate, and Financial Institution issuers and borrowers
- The bond was issued in October and saw investors bid KSh 37.9 billion ($333 million) in the issuing round, representing an oversubscription of 275%, a record for EABL
The Bond and Loans Awards has ranked East African Breweries Plc’s KSh 11 billion ( EABL ) ($96.8 million) Medium-Term Note among the top corporate deals done in Africa in 2021.
The Awards ceremony usually recognizes the most innovative and ground-breaking deals from Sovereign, Corporate, and Financial Institution issuers and borrowers.
It named the bond the Local Currency Corporate Bond Deal of the Year.
EABL Group CFO Risper Genga-Ohaga said issuing the bond was the right decision.
“When we issued this bond, we had confidence in the operating environment as we had studied the economy during this pandemic era. It was the right time to proceed as the market was ready to continue investing in different businesses to improve our economies, safely and surely.”
The bond was issued in October and saw investors bid KSh 37.9 billion ($333 million) in the issuing round, representing an oversubscription of 275%, a record for EABL.
EABL offered the five-year, fixed-rate instrument at an interest rate of 12.25 per cent, payable semi-annually.
The offer was opened on October 6 and closed on October 21, and was listed for trading on the Nairobi Securities Exchange from November 1.
The company said the oversubscription signified the trust stakeholders have in the EABL brand, celebrating 100 years of the Kenya Breweries Limited brand.
To rank bonds, Bonds and Loans have an exhaustive selection process that involves close examination of deal size, tenor, structure, and distribution; analysis and background of the borrower.
They also consider the accessibility to financing, with extra credit for those deals showing high-quality execution, accessing new pools of liquidity, innovative structuring, and opening up new markets.
“The exhaustive selection process involves close examination of deal size, tenor, structure, and distribution; analysis and background of the borrower and their accessibility to financing; with extra credit for those deals demonstrating high-quality execution, accessing new pools of liquidity, innovative structuring, and opening up new markets,” Bonds and Loans says on its website.
The Bonds and Loans Africa Awards are held every year, but the 2021 edition was postponed because of the disruptions caused by COVID-19.
The Bonds & Loans Africa Awards ceremony in 2022 will feature winners from both years – winners selected on the performance in 2020 and 2021.
In a related story, East African Breweries PLC (EABL) reported KSh 54.9 billion in net sales for the half-year ended 31 December 2021, representing a 23% growth compared to the same period last year.
During the period, volumes grew strongly at 23%, driven by investment behind brands and innovation in the route to market in response to consumer behaviour shifts.
The continued investment in the capacity of KSh 6.2 billion enabled EABL to respond to the increased consumer demand rapidly.
The Group’s profit after tax grew 131%, primarily driven by the higher net sales, margin expansion, robust cost management and the re-opening of bars in Kenya in the second quarter.
“During this pandemic, our strategic clarity enabled us to maintain focus on brand-building, active portfolio management, consumer-led innovation, and digital transformation, all executed through extra-ordinary efforts and resilience of our people,” EABL Managing Director Jane Karuku said.
During the period, net sales in Kenya increased 27%, primarily due to accelerated strategic investment behind brands and channels.
The re-opening of bars in the second quarter improved net sales growth.
The CEO added that the trading environment remains uncertain with the lingering socio-economic impact of the pandemic, excise tax volatility, and the upcoming electioneering period in Kenya.
“However, we are cautiously optimistic that the regional economies will continue on the recovery path,
sustaining growth momentum across East Africa.”
The Board has recommended an interim dividend of KSh 3.75 per share. This reflects EABL’s strong
performance and confidence in the long-term growth and sustainability of our business.