Apr 2013 Financial News

CL Financial to sell whisky maker

Apr 16, 2013

Cash-strapped CL Financial has agreed to sell Burn Stewart Distillers to South African drinks group Distell for US$244 million (TT$1.6 billion), a report in Britain’s Financial Times said yesterday.

The purchase of Burn Stewart, which owns brands including blended whisky Scottish Leader and the Islay single malt Bunnahabhain, would give Distell access to the “highly attractive and growing” market for Scotch whisky exports, the South African group said in a filing to the Johannesburg Stock Exchange.

With a valuation of more than 20 times Burn Stewart’s calendar 2011 operating profit of £6.9m, the deal marks a vote of confidence in Scotch’s future prospects. It comes just over a decade after the then loss-making Burn Stewart was bought by CL Financial in a £49m takeover, the Financial Times reported.

Burn Stewart is based in East Kilbride, near Glasgow, Scotland. It employs around 270 staff in operations including three single malt whisky distilleries, a blending and maturation plant, and a bottling operation.

Distell said the deal, which it estimated would reduce earnings per share by about three per cent, filled a “category gap” in its portfolio.

Distell already owns South African brands including Bain’s Cape Mountain Whisky, marketed as South Africa’s first single grain whisky, but has much wider ambitions.

Buying Burns Stewart was an important step in the South African group becoming a “global industry player”, it said.

The government has been selling or negotiating the sales of key CL Financial assets in a bid to recoup some of the $20 billion it has spent since 2009 in bailing out the former financial empire.

In January 2013 the sale of Jamaican based spirits manufacturer Lascelles de Mercado to Italian firm Campari was scheduled to be completed.

Contacted by telephone yesterday, CL Financial chairman Gerald Yetming said he was not in a position to comment, but the company would be issuing a statement on the sale soon.


Source:
By Carla Bridglal
Trinidad Express
Tuesday April 16, 2013

http://www.trinidadexpress.com/business/CL-Financial-to--sell-whisky-maker-203117401.html