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Cobra
Beer Secures Investment For Growth |
* Raises
a total of £27.5 million
* Investment
focuses on UK and India
* Pre-money
valuation of £80 million
Award-winning
Cobra Beer Ltd, one of the fastest growing beer companies in the UK,
announces that it has successfully raised a total of £27.5
million to fund the next phase of the company's development.
Cobra's
strategy for the next few years focuses on accelerating business
growth in the UK and India, as well as continuing to develop the
company's South African and export activities.
Out of the
total raised, £13 million has been used by the company to redeem
all its convertible cumulative redeemable preference shares, which
were due to be redeemed in 2007.
The remaining
funds, after £1.5 million costs, will largely be used to finance
Cobra's expansion plans in the UK and India, to raise financing for
marketing and distribution in both countries, as well as working
capital and to expand draught beer capacity in the UK. Additional
funding will go to international markets, including South Africa and
exports. Cobra Beer's lawyers throughout the process have been Clyde
& Co.
Founder and
Chief Executive, Lord Bilimoria CBE DL, said:
"Our
mission since day one has always been to brew the finest ever Indian
beer and make it a global beer brand. In the most competitive beer
market in the world, Britain, our passion and entrepreneurial spirit
have driven us to achieve against-all-odds. Now we have the funds we
need for our medium-term development and have ambitious plans to
build on the current success of Cobra Beer to reach our goal."
The amount
raised comprises £25 million of unsecured loan notes (through a
flexible PIK instrument) issued by OZ Sculptor Finance Ireland
investment funds managed by Och-Ziff Management Europe Limited
(collectively, "Och-Ziff") and £2.5 million raised via
a placing of new ordinary shares to private and institutional
investors at a pre money equity value of £80 million.
COO &
Finance Director, Dynshaw Italia, comments:
"Since
Karan Bilimoria started Cobra Beer in 1989 with £20,000 of
student debt, Cobra Beer has always strived to raise capital through
a number of innovative ways. As the largest sum of money that Cobra
Beer has raised to date, these funds will help strengthen the Cobra
beer brand within the UK and enable the company to establish a strong
foothold in India and export markets.
Product
development has created significant sales opportunities for Cobra
over the next few years. New products, launched during 2005, were
Cobra 0.0% an alcohol-free beer; Cobra Lower Cal, a lower calorie
beer with half the calories of a regular Cobra; and King Cobra, the
world's first double-fermented strong lager (8%ABV) sold in
Champagne-style bottles.
Following the
success of these launches in the UK, the company plans to roll-out
these products in all sectors of the market internationally.
In the UK,
Cobra beer is currently stocked in 90% of the 6,000 Indian
restaurants licensed to sell alcohol. The company plans to increase
its share of this market by expanding sales of draught beer,
particularly in the North of England.
Since
launching its award-winning embossed bottle in 2003, Cobra beer's
presence in the mainstream on-trade has grown from virtually nothing
to being available to over 6,000 outlets, including 570 JD
Wetherspoon outlets and in Living Ventures, Punch Taverns and De Vere
Hotels. With draught beer sales dominating the on-trade market, Cobra
Beer is investing significantly in this area, recently launching a
new 'twisted' draught beer font, which showcases low-cost point of
sale marketing with a visually-stunning design. Cobra Beer is
currently available on draught in the Mitchell & Butlers estate.
At the same
time, the company believes it can achieve further penetration of the
supermarket sector, where Cobra Beer has succeeded in maintaining its
premium position relative to other premium lagers, through the
introduction of multi-packs and new products. Cobra is available in
over 5,000 outlets of major supermarkets and off-licenses and sells
to all the major supermarket groups, including Tesco, Sainsbury,
Waitrose, Somerfield, Morrisons and ASDA.
The company
anticipates substantial growth in India's beer market over the next
10 years. Cobra Beer is brewed for the local market under licence by
Mount Shivalik, a large independent brewer operating principally in
Rajasthan in the North West of India, and has plans for establishing
further brewing capacity in the North, East and South regions.
In South
Africa and export markets, the company plans to grow sales of its
Cobra Beer. Cobra Beer has been exported to 40 countries and will
continue to export beer to the USA under the Krait brand. In the US,
Krait Free (equivalent of Cobra 0.0%) and Krait Lite (equivalent of
Cobra Lower Cal) are also currently available.
In June 2006,
Cobra Beer struck gold winning no fewer than 12 Gold medals for its
beers at the prestigious Monde Selection, Brussels 2006 - World
Selection of Quality. For the second year running, Cobra was awarded
more Gold medals for beer than any other company in the world,
including a highly-coveted Grand Gold medal for its Indian-brewed beer.
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