AB InBev hoping to raise billions through bonds, initial public offering

AB InBev is looking for money to settle its substantial debts: the world's largest brewing company has managed to raise 13.5 billion euros with a new bond offering and is also considering to float its Asian branch.

 

Putting off the pile of debt

The Belgian company has issued bonds worth 15.5 billion dollars in six instalments. Investors happily went for the offer, considering the debenture loan promises a return 2.75% higher than American government bonds on a 40-year term.

 

AB InBev intends to use the money to cover debts that go back to the SABMiller acquisition in 2016. On average, those debts will last for 4.6 years, while the new 13.5 billion will cover them for 20 years. Analysts however are not too enthusiastic about the brewery group's accumulating debt, which they keep putting off. Last summer, AB InBev's debt load was close to five times their gross operational result (EBITDA): over 110 billion dollars (96 billion euros).

 

Asian shares? 

For this reason, the company is considering an initial public offering of their Asian branch. According to Bloomberg, that should bring in about 5 billion dollars (4.4 billion euros), which should help to soften the debt load.

 

AB Inbev neither confirms nor denies the rumours. If true, the idea is still fresh and decisions are unlikely to have been made yet. In any case, the Asian department is "dear" to the brewery, according to a statement. At an estimated value of sixty billion euros, it is indeed a very important division for the company.