UK: Greene King launches rights issue
Greene King, the UK brewer, is to launch a rights issue of more than GB200m in order to raise funds for acquisitions and help pay down debt.
Greene King said today (23 April) that it would seek to raise GBP207m(US$270m) through the issue of more than 80m new shares.
The Old Speckled Hen brewer said that the move will allow it to acquire pubs in southern England and Scotland that may become available at attractive prices in the economic downturn.
The extra funding will also be used to pay down some of the firm's debt.
"Today's rights issue will enable us to take advantage of a compelling opportunity both to enhance our estate and further strengthen our sound capital position," said Greene King CEO Rooney Anand.
"The increase in high quality pubs being put up for sale will deliver chances to make earnings-accretive acquisitions. At the same time, there is the potential to opportunistically buy back our debt at discounted levels."
Greene King said today that it intends to pay a 2009 final dividend of GBP0.15 per share, level with 2008.
The brewer said that trading across its pub and beer porfolio has improved in recent weeks.
Own-brewed beer volumes have risen by 1.8% in the 49 weeks to 12 April, compared to the same period last year, Greene King said. In January, the firm said that own-brewed volumes for the first 38 weeks of its fiscal year, ended 25 January, were down by 1.5%.
During the last year, Greene King has also disposed of 124 properties, raising GBP43m. The group's fiscal year ends on 3 May.
The premium beer sector has suffered during the downturn but was already enduring difficult times, according to a report from Key Note. Ben Cooper reports....
Greene King has pledged to maintain brewing at the Belhaven Dunbar brewery in Scotland, after the group announced it would cut jobs at the site by moving bottling operations to southern England....
Greene King, the UK brewer and pub owner, has reported an increase in beer sales for the first 17 weeks of its fiscal year, despite a shrinking UK market....
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