By CHATULA KANGALI –
THE British American Tobbaco Zambia (BATZ) is seeking approval from its shareholder before acquiring a $15 million loan from BATIF Dollar Limited for the construction of a tobacco manufacturing plant in Zambia.
BATIF Dollar Limited is a subsidiary of British American Tobbaco (BAT ) based in the United Kingdom.
According to the Lusaka Securities Exchange (LUSE) update, the company is exploring debt financing options to raise funding for the construction of a cigarette manufacturing plant.
One of the options under consideration is a revolving loan facility of US$ 15 million from BATIF Dollar Limited which operates as a subsidiary of the BAT Group.
The company stated that BATZ has been sourcing 95 percent of its cigarettes from BAT Kenya Plc and 5 percent from BAT South Africa.
BATZ intends to invest in tobacco manufacturing because the current excise duty regime favours local manufacturers over imports.
“The Board therefore considered it necessary to have local production in the country which would not only reduce the tax burden and bring about a fundamental change in the long term financial position of the company but in addition create employment for the locals,” states the LuSE update in part.