Prospectus
PROSPECTUS No. 01/01
Prospectus for the Offering of 250,000 Registered Ordinary Shares at par value of Birr 1,000 each so as to increase the capital of the company
Table of Content
Statement by the Board of Directors and Main Promoter Summarized Information on Sales of Shares Statutory Information Establishment Sales of Share For foreign investors Profit Allocation Supplementary Information Beer Consumption in Ethiopia Strength and opportunities of Habesha Breweries S. Co. Decisive Assumptions Financial Considerations Risk Factors under consideration 2 4 7 7 11 14 15 15 21 22 23 24 27
Habesha Breweries S. Co. Offers 250,000 registered ordinary shares for public subscription so as to increase its capital to birr 250,200,000
PAR VALUE PER SHARE OFFERING PRICE PER SHARE BIRR 1,000.00 BIRR 1,000.00
BIRR 60.00 (6%)* 40% payment plus the service charge on subscription 20% by ========= June 8, 2010 20% by ========= Sept 5, 2010 20% by ========= Sept 5, 2012 15 shares (Birr 15000) 122,500 shares (Birr 122,500,000) October 18, 2009 April 8, 2010 Habesha Capital Services Plc. ADDRESS Yeka sub-City, Kebele 11/12, House No. new, Rebecca bldg, 6th floor Room no. 603/604 A.A, Tel: 0118602500
Hexa United Business & Investment LLC 13036 Jingle Lane, Silver Spring, MD 20906 Toll free: 1 800 575 2810
www.hexaunited.com 4
President of Addis Ababa and Ethiopia Chamber of Commerce. 2. Ato Yilma Tiruneh: Formerly: (1) General Manager of Ambo Mineral Water Factory, (2) General Manager of factories under Textile and Food Corporations within the former Ministry of Industry. 3. Ato Sime Kulala: Formerly, General Manager of MEWIT; founder and board member of Nib International Bank S.C and Nib Insurance S.C. 4. Ato Mekonen Abebe: Formerly, Executive Officer Marketing, in the Ethiopian Air Lines. 5. Ato Tesfaye Bedada: Formerly: (1) Master brewer and later General Manager of Bedele Brewery; (2) Quality controller,
Corporation A.A Liaison Office; currently Board Director of Habesha Cement S.C and Zemen Bank S.Co. 8. Ato Mersha Alemu: Director of Administration and Finance at HAGBES; formerly Associate Promoter of Habesha Cement S.Co. 9. Ato Ahmed Teyib: Formerly: (1) Manager of Natural Gums Production and Marketing Enterprise, (2) Sales Manager of UD, Nyala Motors Company. 10. Ato Bisrat Woldu: General Manager of Bahir Dar Ghion Hotel. 11. Ato Mekonen Demisse: Formerly, Head of Contract Administration in the Ethiopian Air Lines; formerly Civil Affairs Officer of the Rehabilitation Program in Yugoslavia, under the United Nations. 12. W/ro Getenesh H/Mariam:- Managing Director of General Insurance Brokers. Former staff of Ethiopian Insurance Company, worked as head of various operational duties. 13. Ato Bezzaworq Shimellash:- Law Consultant and Attorney, he has worked as Legal Advisor of Export Trade Ministry, and served as High Court Judge and Principal Public Prosecutor of Special Court. 14. Ato Mebratu Lemma: - Formerly: (1) Deputy Commissioner Ethiopian Tourism and Hotel Commission. (2) Addis glass Factory Manager, (3) St. George brewery and Meta Brewery
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Auditor
To be appointed by the General Meeting of Shareholders/ Subscribers.
Bankers
United Bank S.Co. Misrak Branch; Commercial Bank of Ethiopia, Addis Ababa Branch; Dashen Bank S. Co. 22 area Branch; Wegagen Bank S. Co. Bole Medhanialem Branch; Bank of Abyssinia S. Co. Olympia Branch; Awash International Bank S. Co. Legehar Branch; Nib International Bank S. Co. Balcha Abanefsso Branch; Zemen Bank S. Co. Main Branch; Buna International Bank S. Co. 22 mazoria branch
Statutory Information
Establishment
Habesha Breweries is a Share Company established as per the Commercial Code of Ethiopia (1960). It is registered with the Ministry of Trade and Industry on 02/10/09 E.C under registration number 04/2/25619/02 proclamation No. 67/1989. Name of the Company - Habesha Breweries S. Co. The Head Office of the Company is located at Kirkos Sub-City, Kebele 02, House No. 676/05, Addis Ababa, Ethiopia. Objectives, Strategies and Goals The business objectives of the Company as stipulated in Article 4 of the Memorandum of Association of the company include the following:
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Existing Capital
The Company is established with capital of Birr 200,000 which is fully paid in cash. The capital is divided into 200 shares whose par value is Birr 1000.
Organization
The highest decision-making body of the Company will be the General Meeting of Shareholders. This would normally meet once a year (Annual General Meeting) to elect the Directors and fix their remuneration, approve the reports of the Board and the External Auditor, and decide on the appropriation of the net profits of the Company. However, a General Meeting of Shareholders can be held more often, according to the Company Statutes, in terms of an Extraordinary General Meeting. The Board of Directors, consisting of 5 members, each elected for a period of 3 years, will be the policy organ of the Company. It is responsible for policy matters, approval and follow-up of annual programs and budgets, and the appointment of the General Manager of the Company. The first five Directors are appointed by the Meeting of Subscribers (in accordance with Articles 320 and 321 of the Commercial Code). As stated in the Memorandum of Association of
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Management
The Company has set up an office, headed by the General Manager of the Company and its main promoter Habesha Capital Services Plc.
Auditors
To be appointed by the General Meeting of Shareholders/ Subscribers.
Financial
Present Status The Company is offering 250,000 shares at par value of Birr 1000 to increase its capital from Birr 200,000 to 250,200,000. The offer includes a 6% (six percent) service chare (premium) which is accounted separately from the equity investment amount. This is to cover all organizational and expenses of the capital increase process. All subscribers should note that the service charge (premium) paid by them is not refundable under any circumstance. Bank and Other Loans There are no bank loans at present and the Company intends to raise finance primarily through equity finance in terms of the current offer and through investors deposits. Loans from banks to full fill the equity portion. Dividend Policy Each shareholder is entitled to a dividend on the net profit of the Company. The General Meeting of Shareholders will declare the amount of dividend to be paid.
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Sale of Shares
Description of Shares 250,000 ordinary registered shares are offered for sale. The par value of one share Premium on one share be Birr 50 (5%)/share. Terms of Payment 1st Payment 2nd Payment 3rd payment 40% upon subscription plus the entire service charge (premium) of 6% for the shares subscribed 20% by June 7/2010 20% by September 5/2011 Birr 1,000.00 Birr 60.00 (6%)
The remainder 20% by September 5/2012 (This balance of payment may be covered by the first dividend as the Brewery begins operation) Minimum Investment 15 shares (Birr 15,000 plus premium Birr 900.00 [6%]) Maximum Investment 122,500 shares (Br. 129,850,000) Offer Opening Date Offer Closing Date October 19, 2009 April 8, 2010
Subscribers who subscribe up to April 8, 2010 shall benefit from the special benefit allocation to founders. The capital from the shares shall be deposited in a blocked account and shall be operated only upon the resolution of the General Assembly of Shareholders. The premium shall be deposited in a Current Account opened in the name of Habesha Breweries S. Co. The fund shall be used for the various pre-operational activities and it shall be audited by the external auditors.
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3% (three percent) to the founders /subscribers of the company. 7% (seven percent) to the main promoter, Advisors and significant contributors of the company. The 7% allocated to the Main promoter, Advisors and significant contributors of the company. will be distributed as follow: 3% (three percent) to the Main promoter. 3% (three percent) to be shared equally among the advisors. The remaining 1% (one percent) is reserved for significant contributors who would play a significant role towards the realization of the project and whose effort and contribution is recognized by the Main promoter. To facilitate this, the main promoter will notify in writing to those individuals or companies how much they will be entitled to from the 1% allocated to this group. The starting date of operation is the date after the official completion of Commissioning of the plant. By applying for subscription of shares each applicant irrevocably agrees that ten percent (10%) of the net profit for the first three years of operations will be allocated to the Founders/ subscribers, Main promoter advisors and significant contributors of the company as stated above. SUPPLEMENTARY INFORMATION 1. Investment Environment and Considerations The business environment in Ethiopia is very favorable and the government gives special support to those who want to build breweries. The demand-supply gap for beer is big and there will be a significant unsatisfied demand for beer for years to come as the economy is expected to grow in double digits for the foreseeable future. Encouraged by these factors some investors have planned to enter the market and more are still planning to do so. Unfortunately, investing in brewery is a capital intensive undertaking and needs specialized knowledge and skills. These factors prohibit almost all
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gains
in
Africa to a
and
Asia
where
beer's on
share
of and
commercially produced alcohol now stands at 49.0% and 32.8% partly, greater emphasis quality
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brewery technology. However these countries may also minor differences to in their a processes. superior Due to
Habesha Brewery has preferred the eclectic approach and prepared produce quality beer
implementing the most beneficial and appropriate processes from each country, thereby creating a hybrid 2.3 Regarding Trained Manpower Habesha Brewery is staffed with technical personnel who are highly competent professional trained locally and abroad,
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technology.
supervision Habesha
of beer
Revenue/lit Cost Ex. factory/lit Gross Income Less Adm/ Sales Exp. Income/lit @300,000 hl Income Total income Earning per share ROI
9.50 7.01 2.49 0.25 2.24 (10%) 30,000 hl 6,720,000 153,060,000 153,060,000 135,000,000 153,060,000 450,000,000
113.4% 34%
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The estimated cost of machinery for a new brewery of 300,000 hl/annual capacity is about 25,000,000 Euro or Br. 450 million; Last three years data of the existing breweries, shows that the demand increase on an average of 11%; Current Beer production capacity is 3.35 million hectoliter; Current Production of Beer (consumption) is 2.9 million hectoliter; The demand increase of 11% per year entails that the current Production capacity should be doubled by the end of the 8th year; Current Ethiopias beer consumption per head is 4 liters/ year; For comparison purpose the beer consumption per head of few African countries: - Kenya - Nigeria ------------- 22 lit/ year ------------- 53 lit/ year - Cameroon------------- 25 lit/ year - South Africa----------- 58 lit/ year
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