Kasapreko, a leading producer in the alcoholic and non-alcoholic beverage industry, has an ambitious plan to expand widely in Africa under the African Continental Free Trade Area (AfCFTA) agreement.
The company already operates in Nigeria, Liberia, and Kenya and plans to expand operations to more African countries soon.
Managing Director of Kasapreko, Mr. Richard Adjei, noted that the company is among the first Ghanaian companies to export to Kenya and South Africa under AfCFTA.
GH₵150m first tranche bond
The Consolidated Bank Ghana (CBG) has raised GH₵150 million on the Ghana Stock Exchange for Kasapreko Company Limited, an indigenous beverage manufacturer.
GH₵600m full bond
This amount, the first tranche of a GH₵600 million facility, will be utilized to support the company’s working capital, finance capital expenditure, including the expansion of operations, and refinance short-term debts.
Mr Adjei emphasized Kasapreko’s mission to deliver unparalleled quality and excellence to consumers worldwide as the company continues to explore new territories and push the boundaries of innovation.
Looking ahead, he disclosed that the capital to be raised in the third and fourth years would determine whether or not they should establish their own factories in other countries as part of their expansion strategy.
He sees the bond as a great opportunity for Ghanaian businesses to open up and take advantage of the market.
He expressed the company’s ambition to become an African giant, making Ghana proud.
He stated that this landmark move underscores Kasapreko’s commitment to growth and operational excellence within Ghana’s vibrant economic landscape.
He expressed confidence that the bond issuance would accelerate the company’s growth trajectory, further solidifying its position as a beacon of excellence within the beverage industry.
Mr Adjei emphasized, “As the first manufacturing company to raise a corporate bond in Ghana, we are thrilled to embark on this momentous journey of listing our GH¢600 million bond and grateful for the confidence the market has shown in Kasapreko.”
He highlighted that this strategic move not only demonstrates their commitment to sustainable growth but also signifies their confidence in Ghana’s vibrant economic ecosystem.
The listing of the GH¢600 million bond on the Ghana Fixed Income Market serves as a testament to Kasapreko’s dedication to fostering economic development, job creation, and value addition within Ghana.
Mr Adjei explained that the bond provides patient capital, generating more money without requiring early repayment of the principal.
Additionally, he noted that the cost is cheaper than traditional banks, making Kasapreko’s operations more affordable, which would reflect in product pricing.
Moreover, he highlighted that the bond presents an opportunity to export products and generate foreign exchange to support Ghana’s balance of payments.
Kasapreko’s market shares
Mr Adjei emphasized Kasapreko’s market share dominance, noting their leading position in the alcoholic beverage sector for the past 10 years, significant presence in the top three in water, and strong foothold in the soft drinks category ranking among the top three.
This demonstrates Kasapreko’s substantial contribution to various segments of the beverage market.
Bond 100% over subscribed
The bond was over 100% subscribed, making it the single largest capital raise on the Ghana Fixed Income Market.
Tranche one has an issue date of January 29, 2024, and a maturity date of January 29, 2027.
In subsequent issuances of the remaining GH¢450 million, there will be opportunities for individual investors to participate.
Kasapreko secured the capital at a rate of 26%, compared to the typical bank loan rate, which would include the Ghana Reference Rate (GRR) of 31% plus a spread of about three basis points, resulting in a total interest of 34%.
This makes the bond option chosen by Kasapreko nine percent cheaper.
Additionally, while the GRR fluctuates, the bond offers a fixed rate for the duration of the facility, providing stability for financial planning.
State-of-the-art production facility
Kasapreko stands as a beacon of quality, innovation, and heritage, boasting of a state-of-the-art production facility, global export reach, and an iconic flagship product, Alomo Bitters.
The company has leveraged research and development, incorporating cutting-edge technology with local and traditional recipes in the production process.
Moved by the increasing demand for quality alcoholic products, Ghanaian businessman Kwabena Adjei founded Kasapreko Company Ltd in 1989, with the niche of producing herbal-based alcoholic products sourced locally.
The company that started in a small garage of Dr. Kwabena Adjei has developed into a state-of-the-art production facility and exporting to 16 countries globally under various brands in the bitters, whisky, gin, liqueur, brandy, carbonated soft drinks, and wine categories.
