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Afdis concludes rights issue

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ZIMBABWE Stock Exchange-listed alcoholic beverage maker, African Distillers (Afdis) majority shareholder, African Distillers Holdings, has increased its shareholding following the conclusion of a $5 million rights offer Afdis Holdings was the underwriter during the capital-raising intiative.

The company, according to a statement yesterday, successfully raised the targeted capital despite recording a 67,83% subscription rate on the back of liquidity constraints besetting the economy.

The company last month announced that the fresh capital was expected to commission a new cider manufacturing plant this year as it seeks to grow domestic and regional market share.

The rights offer shares are expected to be listed on the Zimbabwe Stock Exchange from January 20, 2013.

A rights offer is an offer to existing holders of securities to subscribe for or purchase further securities in proportion to their holdings made by means of the issue of a renounceable letter or other negotiable documents which may be traded (as either fully paid or nil paid rights) for a period before payment for the securities is due.

Afdis marketing, sales and distribution director Albert Chitapi last year said the company was currently importing two million litres of ciders (Savanna and Hunters) annually and the new plant could increase the production ready-to-drink alcoholic beverages to 6,5 million litres. Currently, the firm is producing spirit coolers — Sting and Espirit.

Out of these volumes, the company foresees half of this being consumed in Mozambique, Zambia and Malawi.

The company currently has six depots in Bulawayo, Harare, Kwekwe, Masvingo, Mutare and Victoria Falls.

The company, an associate of ZSE heavyweight, Delta Corporation, according to the rights offer circular to shareholders, has over the years been importing and distributing cider products from South Africa.

An increase in duties on imported products, the company said, resulted in margins and sales volumes on these products declining.

Demand for ciders, however, slowed down towards the last half of the year due to the 25% surtax levied on the products in 2012. Afdis Limited after-tax-profit for the six months to June 2013 declined to $808 767 from $1,1 million recorded during the same period last year due to rising costs.

Earnings per share decreased to 0,85 cents from 1,2 cents. Despite achieving growth in revenue, administrative costs rose to $1,2 million from $900 000 while distribution and other operating costs also increased. Revenue was up 16% to $22 million from $19,5 million.

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