EABL’s mini-IPO begins on high note

BY GEOFFREY NANGAI
BOARD members of the East African Breweries Limited (EABL) have approved the sale of the company’s 58,095,693 shares in Tanzania Breweries at a price of 2,060 /- per share during the company's mini-Independent Post Offering (IPO) that kicked off last Friday.
Receiving agents include Solmon Stockbrokers Limited, National Bank of Commerce (NBC), Orbit Securities Company Limited, Core Securities, Tanzania Securities Limited, Rasilimali Limited, Zan Securities Limited and Vertex International Securities Limited.
Having obtained the merger clearance from the Fair Competition Commission (FCC), EABL completed the strategic acquisition of 51 percent of the issued share capital of Serengeti Breweries Limited (SBL) with the FCC clearance guaranteeing that EABL subsequently diversifies its shares in TBL.
The offer price is however slightly above the TBL's current trading price but is within the protection price set by the Dar es Salaam Stock Exchange (DSE) with potential investors entitled to buying a minimum of 50 shares.
A prospectus signed and released by the TBL Board Chairman Cleopa Msuya shortly before opening the IPO said Orbit Securities Company Limited had been endorsed as the Lead Adviser during the mini-IPO that closes November 25, 2011.
“Barclays bank will be the receiving bank with CRDB bank acting as the Registra," the prospectus said.
"The offer is open to any member of the public including individuals, companiesand institutions. Tanzanians will be given priority and after, remaining shares will be allocated to other East African applicants," the prospectus read.
The Orbit Securities Chief Executive Officer Lauren Malauri however told this paper that the min-IPO’s first trading was brilliant an indication that the IPO will record success.
“We have started on a very high note today being the fist day of the IPO. With today’s trading, we anticipate that the mini-IPO may be over subscribed though it is too early to determine this,” he said during a telephone interview.

Analysts say EABL’s move is geared towards making it the largest East African brewing company owning 80 per cent of Kenya Breweries, 98.2 per cent of Uganda Breweries and 51 per cent of Serengeti Breweries limited (SBL) in Tanzania.

EABL is one of the few companies trading at various bourses in the East African region, having listed on Dar es Salaam Stock Exchange (DSE) in 2005, the Nairobi Stock Exchange (NSE) in 1934, Uganda Securities Exchange (USE) in 2001