Nigerian Breweries obtains approval on plans to raise N599.1bn via rights issue
By Oluwaseyi Lawal
Nigerian Breweries Plc has secured the necessary approvals from its shareholders and has now obtained clearance from both the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) to raise N599.1 billion through a Rights Issue.
This offering includes 22,607,491,232 Ordinary Shares, each valued at 50 kobo, which will be available to shareholders listed in the register of members as of the Qualification Date, 12 July 2024.
The Rights Issue will be offered at a ratio of eleven (11) new Ordinary Shares for every five (5) shares owned as of the Qualification Date, with an Issue price of N26.50 per share.
This initiative is a key element of Nigerian Breweries’ Business Recovery Plan, aimed at reinforcing the company’s capital structure by reducing debt, mitigating foreign exchange risks, and lowering bank borrowings. These actions will provide the company with increased financial flexibility to support ongoing growth and ensure business continuity.
During the signing ceremony held yesterday in Lagos, the Managing Director of Nigerian Breweries, Mr. Hans Essaadi, stated that the Rights Issue offers shareholders a chance to back the company’s strategic goals and be part of its future growth.
“The tough business landscape characterised by double-digit inflation rates, naira devaluation, FX challenges, and diminished consumer spend has taken its toll on many businesses, including ours.”
Essaadi also revealed that the funds raised from the Issue will be directed towards settling the company’s obligations in both foreign and local currencies, effectively eliminating foreign exchange risks and revaluation losses. This move is expected to boost long-term profitability and create sustainable value for shareholders.
Vetiva Advisory Services Limited and Stanbic IBTC Capital Limited are serving as the Lead Issuing House and Joint Issuing House, respectively, to guide the company through the Issue process. The acceptance period for the Issue is slated to begin on September 2, 2024, and conclude on October 11, 2024.
The complete terms of the Rights Issue will be detailed in a Rights Circular that will be sent directly to eligible shareholders of the Company. This circular will include a Provisional Allotment Letter and an Acceptance Form. Shareholders are advised to carefully review the Rights Circular and, if uncertain, seek advice from their Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor, or any other professional advisor before deciding to subscribe.
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