Jos Gains to 2 1/2-Year High as Debt Paid: Lagos Mover
(Corrects name of brokerage, trader for story published on Aug. 30.)
Jos International Breweries Plc (JOSBREW) rose for a 14th day to a 2 1/2-year high after an investor helped pay the Nigerian beermaker’s debt, opening the way for a possible takeover, Forthright Securities & Investment Ltd. said.
The stock gained 9.7 percent to 2.93 naira by the close in Lagos, Nigeria’s commercial capital, its highest since Feb. 22, 2011. The shares have doubled this year, compared with a 29 percent increase in the Nigerian Stock Exchange All-Share Index. (NGSEINDX)
The Plateau State government agreed to pay 700 million naira ($4.4 million) toward writing off the company’s debt to a local bank, Bright Otoghile, a trader at Lagos-based Forthright Securities and Investment, said today by phone, citing information from the state. Phone calls to the offices of Jos and Plateau State did not connect. The brewer posted a 432 million-naira loss in 2009, according to a 2010 filing to the Nigerian Stock Exchange.
“With the debts cleared, chances are that a major brewer will buy into the company given the acquisitions in that sector and the fact that other small brewers have been taken over,” Otoghile said. It will also help with a “turnaround of the company,” he said.
Africa’s most populous country, with more than 160 million people, is the continent’s second-largest beer market after South Africa, with volumes growing at an annual rate of 6 percent, according to SABMiller Plc (SAB), which acquired Nigeria’s Pabod Breweries in 2009. Other brewers including Diageo Plc (DGE) and Heineken NV (HEIA) have acquired small brewers in the West African nation.
“The debt has been Jos Brewery’s major problem,” Otoghile said.
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