Afdis in bid to raise $5 million

Published: 19 November 2013

Spirits brewer African Distillers said on Monday it intends to raise $5 million through a rights offer of over 15 million shares.

The Zimbabwe Stock Exchange listed company said the funds would be invested in production to increase output, the New Ziana reported.

"The board has found it prudent to invest $5 million towards a new packaging line as well as modernising other existing production facilities," the company said.

"This will allow the company to compete in the regional markets while meeting the demand of our ever growing base of discerning consumers."

A total of 15 451 174 ordinary shares will be placed on offer to existing shareholders at a subscription price of $0.3236 per share on the basis of one new share for every 6.21 shares held.

Afdis Holdings, the company's parent company, is under writing the capital raising initiative.

Afdis said of the targeted amount, $3,35 million would be invested in a bottling plant, and ancillary equipment, while $1,5 million will be used to settle an outstanding loan, with the remainder meeting expenses of the transaction.

Investment in a new plant and product line would enable the company, which has been benefitting from distribution of beer products from South Africa, to widen its income base. Afids said introduction of high duties on imported beer had hit its bottom line, necessitating the diversification.

However, the company requires a host of approvals before the rights offer can be undertaken.

Authorisation will be sought from shareholders at an annual general meeting to be held on December 9, the ZSE's Listing Committee and exchange control authorities.

- New Ziana

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