Nigerian Breweries Plc has announced the launch of its N599.1 billion Rights Issue, aimed at addressing overdue foreign exchange commitments and repositioning the company for improved performance.
The brewing giant is offering 22.61 billion ordinary shares at N26.50 each to existing shareholders, allowing them to purchase 11 new shares for every five held as of July 12, 2024. The Rights Issue, which began on September 2, will close on October 11, 2024.
During the “Facts Behind the N599.1 Billion Rights Issue” presentation held at the Nigerian Exchange Limited (NGX), Managing Director Hans Essaadi explained that currency devaluation and higher interest rates have significantly impacted the company’s financials, leading to losses.
He, however, stressed the long-term viability of investing in Nigeria and expressed confidence that the Rights Issue would restore profitability and enable the resumption of dividend payments.
“These are tough times for our business. We started expanding our facilities two years ago, for which FX commitments were required, with a view to future-proofing the business. This led to our incurring a substantial debt due to the devaluation of the naira. Despite this challenge amongst others, we believe that investing in Nigeria is the right thing to do as the long-term fundamentals remain strong” he said.
He added that the company’s expansion into the wine and spirits market, following its acquisition of Distell Wines and Spirits Nigeria Limited, is part of a broader strategy to create long-term value for shareholders.
The Chief Executive Officer of NGX, Jude Chiemeka, commended Nigerian Breweries for utilising the “Facts Behind the Figures” platform to present its strategic business recovery plan.
He noted that the transparency and operational updates shared by the company are crucial in fostering market activity and investor confidence.
Company Secretary and Legal Director Uaboi Agbebaku also explained that the majority of the funds raised will go toward settling outstanding FX obligations, reducing the company’s exposure to future currency devaluations. The remainder will be used to lower naira-denominated debt, thereby decreasing interest expenses.
Nigerian Breweries, a member of the Heineken Group, is Nigeria’s largest brewing company and produces well-known brands such as Heineken, Maltina, Amstel Malta, and Gulder from nine breweries across the country.
