Lion seeks $30M

Press, 16 September 1982, Page 22

Lion seeks $30M

Lion Breweries, Ltd. • is seeking to raise $3O million in a debenture issue, the acting chairman, Mr R. C. Bradshaw, has announced. The issue offers a minimum of $2OOO and higher rates are receivable for large investors with more than $lO,OOO to deposit. For smaller investors, the issue offers 17.5 per cent for two years and 18 per cent for all other terms.

However, the prospectus calculates that the real issue offers interest paid : quarterly. “Interest paid and reinvested quarterly at the rate of 17.5 per cent is equivalent to receiving interest every half-year at the rate of 17.88 per cent. Interest paid and reinvested quarterly at . 18 per cent is equivalent to 18.41 per cent paid half yearly,” the prospectus says. A compound stock option is also offered where interest earned is automatically

accumulated and added to the principal sum invested, and further interest is earned on that interest at the same rate.

The prospectus says that $lOOO compounded at 18 per cent a year will become $1696 after three years. $2022 after four years, and $2412 after five years. The asset backing per $lOO of debenture stock is said to be $424. The prospectus says that the rates offered are at or near the maximum permitted under the financial services regulations. The issue •is seeking $2O million and a further $lO million in oversubscriptions. This is the first issue from Lion since 1974. In a letter to shareholders. Mr Bradshaw said that in recent years Lion had expanded its activities and involvement in traditional areas of brewing, accommodation, food and entertainment.

The company had continued to trade profitably during the first four months of the new financial year. "Although affected by escalating costs before’ the wage and price freeze, and by the increased tax from the Budget, profits for the current year are expected to be satisfactory and ahead of last year," he said.

Lion Breweries recently agreed to pay $24 million to its new managing director. Mr Douglas Myers, for his share in New Zealand Wines and Spirits, Ltd.

According to a Press Association report from Wellington, a company spokesman said that the money raised from the debenture issue would be used for the on-going needs of Lion, and that it should not be construed that the debenture issue was to be used to pay for New Zealand Wines and Spirits.