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Less than two weeks after it had signed a deal to
acquire a 30pc stake in Raya Brewery, BGI Ethiopia
has paid 45 million Br solidifying its position as
the largest shareholder in the company. This amount
is 60pc of the 75 million Br worth of shares it has
signed for.
Acceptance of new shareholders like BGI is one of
the agendas set for the second general assembly of
the company scheduled for today, November 4, 2011. A
likely topic of discussion will also be Dawit G.
Egizabehere, a businessman residing in Abu Dhabi,
United Arab Emirates (UAE), who bought 42.5 million
Br worth of shares on the same day as the two
companies had signed the deal.
His purchase on top of the 10 million Br worth of
equity he already had makes him the largest
individual shareholder in the company. Although the
assembly was scheduled for November 26, 2011, it was
postponed for today to coincide with the arrival of
Dawit, who was the first to venture into a private
aviation business in Ethiopia.
Also on the agenda is the construction of the
brewery. Raya, having almost secured the 250 million
Br (30pc) it needs to secure a loan for the
construction of its 750 million Br plant, is
applying to secure a loan for the remaining amount.
“It has already submitted its request to a state
owned bank,” Lemma Bekele, general manager of the
company, had told Fortune during the signing of the
agreement. Although he declined to disclose which
state bank Raya had submitted its request,
Development Bank of Ethiopia (DBE) and Commercial
Bank of Ethiopia (CBE) are the only two options.
DBE has traditionally been the financier for
long-term projects in the country while CBE has
recently changed its strategy, focusing more on
long-term projects, as well.
While it is waiting for a response for its request,
Raya is also drafting an international tender for
the engineering, procurement, and construction (EPC)
of the plant which it plans to float in the next
weeks. This comes after the memorandum of
understanding (MoU) signed between it and Brewtech
GmbH, a German brewery, for similar endeavour had
fallen through.
Brewtech was to handle the EPC using a new machinery
from Germany and refurbished machinery, which was
identified in Denmark. This was to count as its
equity contribution worth 65 million Br in the
brewery, which would be the first to be installed in
the northern part of the country, Maichew Wereda,
660km north of Addis Abeba. Raya is in negotiations
with Wereda administration to secure a 150,000sqm
plot it plans to erect its plant in Tigray Regional
State.
However the deal was cancelled as the company in
Denmark stated to sell off the machinery Raya had
its eye on in piecemeal, according to Lemma.
Since the original understanding was no longer in
place, the plan was abandoned leaving Brewtech to
come up with the money if it wanted to retain the
equity it had planned on.
Once Raya selects a company for the EPC for its
plant, it is expected to become operational in 18
months with an initial capacity of 300,000hl beer.
Its partnership with BGI, the biggest producer of
beer in the country with half the market share,
gives both companies an edge in what has suddenly
become a competitive sector.
The market has seen big players with the entry of
two international brewery giants, Diageo and
Heineken acquiring last three remaining state-owned
brands (Bedele, Harrar and Meta Abo). It was after
losing the competition with these companies to add
the state-owned breweries under its belt, BGI, which
bought the St George brand for 10 million dollars a
decade ago, signed an MoU with Raya on July 1, 2011,
to buy the equity.
While this may help BGI secure the lead it has in
the industry, this partnership is a stepping stone
for Raya. With two companies Habesha and Zebidar
offering equity to enter the market with their own
brand, the partnership with the BGI might give it a
unique position in the market. |
