2 days ago
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Nigerian Breweries Plc said its ongoing N559.1 billion rights issue will improve its balance sheet through elimination of overdue FX payables and reduce local debts.
This was stated at the company’s Fact Behind the Issue presentation held yesterday in Lagos.
Nigerian Breweries is raising N599.1 billion via rights issue offer from existing shareholders. The Company is offering 22.61 billion new ordinary shares at N26.50 per share in the ratio of 11 new shares for every five ordinary shares held as of the qualification date on 12th July 2024. The offer opened on September 2, 2024 and closed on October 11, 2024.
Speaking the managing director/CEO of NB, Hans Essaadi said that with its ongoing rights issue, the Company will return to long term profitability and sustainable value creation for shareholders.
He added that the company will reduce foreign exchange pressures through local sourcing and export operation development.
Essaadi added that “the company will continue to invest in our premium market leadership with higher margin. Being customer centric, NB will focus on affordability in the devaluation crisis next to innovations based on latest consumer trends.”
He explained that the rights Issue proceeds will be utilised to reduce debt and eliminate overdue foreign exchange debt and revaluation losses.
Highlighting the company’s performance, Finance director of the Company, Ben Boer detailed how Nigerian Breweries navigated the challenging Nigerian economic environment in the first half of 2024.
He stated that “despite the impact of devaluation, inflation, and decreased disposable income, the company managed to grow its revenue and improve productivity. However, FX-related debt, exacerbated by the naira’s devaluation from N900 to N1,500 against the dollar, has put pressure on its net profit, necessitating the rights issue.
Boer explained that the rights issue would be used to fully eliminate FX debt and reduce the company’s naira-denominated debt to sustainable levels, saying this move is expected to shield Nigerian Breweries from further FX losses and reduce its interest burden, allowing the company to stabilise its financials.
Also, the Company secretary of NB, Uaboi Agbebaku noted that N328 billion of the funds would go towards repaying FX obligations, with the remainder allocated to local debt repayment.
Agbebaku urged investors to support the initiative, citing Nigerian Breweries’ resilience since its founding in 1946.
The chief executive officer of NGX, Jude Chiemeka emphasised the Company’s longstanding presence in the Nigerian market, having been listed since 1973.
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