Standard Bank Group have advanced a long-term loan of Sh12.5 billion (US$125 million) to East African Breweries Limited (EABL). These funds will be utilized for the purpose of develop the Senator Keg processing plant in Kisumu. The processing plant is expected to produce 110,000 direct and indirect employments and further the sorghum demand to 40,000 in the following five years from the current figure of 20,000. The company said that Standard Bank will funnel the assets to them through Stanbic Holdings, it’s subsidiary in Kenya.
Diageo, the multinational brewer is known to have a 50.2 percent share in EABL. EABL is also committed to provide up Sh2.5 billion on its own accord as part of the Sh15 billion (US$150 million) funding of the factory. The development of the same is required to be finished by July 2019. “We managed to secure a Sh12.5 billion long-term facility,” said Gyuri Geiszl, EABL’s finance director. “We have just drawn down a small portion, about Sh2 billion, since the project has just started.As we move along, we shall generate the cashflow to fund the remaining portion.”
Stanbic Holdings is noted to be one of EABL’s four main bankers and has funded various other projects that have been capital intensive.They are also known to have worked with Barclays Bank of Kenya, Standard Chartered Bank and Citibank. “Six months ago, we had a couple of ideas of how we were going to fund the Kisumu brewery, but we eventually settled on debt,” Mr Geiszl said without disclosing the options dropped.