Here are our views on the news making headlines today for Kenya:
Beer maker, East African Breweries Limited, is seeking to raise KES 11 billion debt through a corporate bond barely two months after maturity of its short-term debt. The company targets Sh5 billion in the first tranche of the bond which will be offered to investors for two weeks beginning Wednesday for a return of 12.25 per cent. A KES 5.4 billion commercial paper issued by the brewer last year matured in January.
Our View: We note the company’s effort to improve its working capital. As per the information memorandum, the company will use a bulk of the bond, KES 5.9 billion in working capital investment and general commercial purposes while KES 5.1 billion would go to long-term capital expenditure. We expect the offer to improve the company’s operating cash flows going forward...