The company targets to raise Sh5 billion in the first tranche of the bond which will be offered to investors for two weeks beginning today. Minimum subscription to the offer is Sh100,000 with investors having an option of a fixed or floating rate of return.
The bond issue comes at a time when the listed manufacturer has been building cash reserves to cut its debt positions.
In the six months to December, EABL had reported a Sh4 billion cut in its short-term borrowings and bank overdraft as it kept an eye on rising financing costs.
Its short-term borrowings stood at Sh9.67 billion, down from Sh12.54 billion in June 2014, while the bank overdraft dropped to Sh566 million from Sh1.75 billion over the six-month period.
EABL’s financing costs however went up despite the cuts to Sh2.18 billion compared to Sh2.04 billion in December 2013.
Some of its debts include a Sh19.5 billion loan from its majority shareholder, Diageo, in 2011.
