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Afdis approves $5 million rights offer
09/12/2013 00:00:00
by Business Reporter
 
 
RELATED STORIES
Afdis spirits up as volumes surge 26pc

ZIMBABWE Stock Exchange-listed wines maker, African Distillers Limited (Afdis) on Monday approved a US$5 million rights offer.

The company is also engaged in talks that could possibly result in beverages firm, Delta Corporation, increasing its shareholding.

Speculation is rife that Delta, the country’s largest manufacturer, distributor and marketer of alcoholic and non-alcoholic beverages, is planning to consolidate its grip on the beverages market by creating a strong family of brands to deal with foreign imports.

The rights offer is targeted to the procurement of a new Ready to Drink (RTD) plant that has the capacity to produce 27,000 bottles an hour.

The plant, which will make 20 million litres of ciders annually, will be commissioned in July 2014.

Afdis operates a distiller in Mutare which produces international brands under licence.

Market watchers said they expected Delta to inject a significant amount of cash into Afdis to give it control of the asset.

Afdis, whose major shareholders include Delta Corporation and insurance giant Old Mutual, has of late been seeking new funding, earmarked for maximising production efficiency as well as entrenching its market position.

The company said in an announcement that it was finalising funding options with key shareholders over its expansion drive. Delta currently controls about 30 percent of Afdis.

“African Distillers Limited advises its shareholders that the company is engaged in negotiations which if concluded successfully will have a significant impact on its operations and share price,” Afdis said in a statement last week.

Afdis has however, reported a surge in capacity utilisation at its plant, bucking an industry-wide trend that has seen capacity utilisation declining due to liquidity constraints and antiquated machinery.

The beverages business is one of the few that has remained robust in Zimbabwe despite the liquidity crisis that has affected operations in other industries.

Delta boosted capacity utilisation to 100 percent and enjoys a near-monopoly on the domestic beverages market.

The biggest benefit after the plant is installed would be very affordable prices which will give consumers an opportunity to enjoy a product they always felt was beyond their reach.



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