ab inbev coronavirus

AB Inbev draws down $9bn loan facility as coronavirus pandemic sweeps the world

17 March, 2020

AB Inbev has drawn down the entirety of a $9bn loan facility from global banks as it bids to ride out the coronavirus outbreak.

The world’s largest brewer previously reported that is has lost more than $280m in sales this year amid widespread lockdowns in China. Countries across the world are increasingly following suit, and AB Inbev’s shares have lost more than half of their value since the start of the year.

The Belgian-based firm’s share price stood at €74.49 on January 2, but opened at just €35.52 today.

AB Inbev has now joined a list of companies including the Hilton hotel group, Boeing and International Airports Group that have rushed to secure capital from credit facilities.

The Stella Artois, Budweiser and Corona brewer is lumbered with around $95bn in debt following an ambitious expansion drive that saw it swallow rivals like SAB Miller.

It has been trying to reduce its debt burden, but that strategy has now been temporarily abandoned in light of the coronavirus pandemic sweeping the globe.

Bank of America, BNP Paribas Fortis, Deutsche Bank and JPMorgan Chase are among the banks to underwrite AB Inbev’s credit facility.

Last month, the brewer forecast a 10% decline in Q1 profit as a result of declining beer sales over the Chinese New Year period. The Brazilian market is also expected to be weaker, while it has now been affected by bar closures across Europe and the US.

Diageo has already reported that coronavirus could knock up to £200m off its profit in 2020, while Suntory has warned that alcohol consumption will be hit by the coronavirus outbreak, denting its profits.

Short selling shares for Italy’s largest drinks group, Campari, was halted on the London Stock Exchange yesterday after a request from Italian authorities. Campari’s stock price reached €9.07 by February 12 and opened at €5.81 today.

The UK Financial Conduct Authority temporarily banned short selling on 150 Italian and Spanish stocks following a request by authorities in those countries.





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Nick Strangeway

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