In a significant move, Nigerian Breweries Plc has received approval from the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) to raise a staggering N599.1 billion through a rights issue.
The company, one of the leading brewers in Nigeria, is offering a total of 22,607,491,232 ordinary shares to its existing shareholders. The rights issue will be on the basis of 11 new shares for every 5 shares held as of the qualification date, which is July 12, 2024. The issue price is set at N26.50 per share.
The decision to raise these funds is part of Nigerian Breweries’ Business Recovery Plan, aimed at strengthening the company’s capital base and deleveraging its balance sheet. This, in turn, will help the company eliminate certain foreign exchange-related exposures and reduce bank borrowings, giving it greater financial flexibility to promote business growth and continuity.
Speaking on the development, the Managing Director of Nigerian Breweries, Mr. Hans Essadi, explained that the rights issue represents an opportunity for shareholders to support the company’s strategic vision and participate in its next phase of growth.
“The proceeds of the issue will be channeled towards the payment of our foreign and local currency-denominated obligations, thereby eliminating foreign exchange risk and revaluation losses, and enhancing long-term profitability and sustainable value creation for our shareholders,” Essadi said.
The rights issue is being managed by Vetiva Advisory Services Limited as the Lead Issuing House and Stanbic IBTC Capital Limited as the Joint Issuing House. The acceptance list for the issue is expected to open on September 2, 2024, and close on October 11, 2024.
Olutade Olaegbe, the Managing Director of Vetiva Advisory Services Limited, commended the management of Nigerian Breweries for their visionary leadership and commitment to executing the rights issue. He expressed confidence that the successful completion of the issue will encourage other global multinational companies to approach the equity capital markets to meet their strategic objectives.
The rights issue comes at a crucial time for Nigerian Breweries, as the company navigates the challenges posed by the current economic landscape. The funds raised will help the company strengthen its financial position and position it for future growth and expansion.
Shareholders of Nigerian Breweries are encouraged to read the Rights Circular, which will provide detailed information on the terms and conditions of the issue. They are also advised to consult their financial advisors before making any investment decisions.
Overall, the rights issue by Nigerian Breweries represents a significant step forward for the company, as it seeks to enhance its competitiveness and deliver sustainable value to its shareholders.
