East African Breweries Limited (EABL) expects to complete the sale of its glass bottles manufacturing subsidiary this month, after a delay in getting approvals from the competition watchdog saw it miss its initial target of June 30.
The regional brewer is selling Central Glass Industries to South Africa’s Consol Glass for Sh4.5 billion as part of a divestiture plan meant to help reduce its debt.
EABL expected to receive the greenlight from the Competition Authority of Kenya (CAK) by early June, but this was delayed until last month holding back the transaction.
“We were expecting to get the go-ahead from CAK either in May or June but the regulator delayed a meeting where approval was to be considered until July,” chief executive Charles Ireland told the Business Daily in an interview after releasing the brewer’s results last week.
“We now expect that the transaction will be complete by the end of August.”
EABL is transferring its 100 per cent stake in the glass-making firm to Consol Glass and entering into a five-year contract with them to supply bottles for its beer and spirits brands.
READ: EABL to earn Sh4.5bn from sale of glass firm
The deal, which was made public on April 1, will also see EABL offer Consol management services for a maximum of one year at a fee.
The transaction’s delay saw the expected proceeds from the sale excluded from the full-year results released by the brewer last Friday.
EABL’s full-year net profit increased 40 per cent to Sh9.6 billion on the back of a land sale in Ruaraka, cost-cutting and a strong performance by its spirits brands.
CGI contribution to this amount was S9.7 million.