Nigerian Breweries seeks N599.1bn capital raise with rights issue
Business a.m.
Nigerian Breweries Plc has taken a significant step towards raising N599.1 billion from its existing shareholders, receiving the green light from the Securities and Exchange Commission (SEC) and NGX Regulation Limited following its shareholders’ approval in April 2024.
The ambitious capital raise, which aims to tap into the company’s strong shareholder base, underscores Nigerian Breweries Plc’s determination to strengthen its financial resources and support its ongoing efforts to expand its operations and cement its position as a leading player in the Nigerian beverage market.
The Company’s plan to raise N599.1 billion involves offering a total of 22.607 billion ordinary shares, valued at 50 kobo each, to shareholders whose names appear on the register of members as of July 12, 2024, which has been set as the qualification date.
As part of its ambitious fundraising plan, Nigerian Breweries Plc has announced that for every five ordinary shares held by shareholders as of July 12, 2024, the qualification date, shareholders will be entitled to purchase 11 new ordinary shares at a price of N26.50 per ordinary share.
The acceptance list for the share offer will open on September 2, 2024, allowing shareholders to place their orders, and close on October 11, 2024.
Nigerian Breweries Plc stated that the share offer is a key component of its business recovery plan, aimed at fortifying its capital base by reducing debt, mitigating foreign exchange-related risks, and lessening reliance on bank loans.
By deleveraging its balance sheet and eliminating certain FX-related exposures, the company seeks to improve its financial stability and flexibility, enabling it to focus on business growth and long-term sustainability.
Speaking at the signing ceremony in Lagos, Hans Essadi, the managing director of Nigerian Breweries, described the share offer as a unique opportunity for shareholders to play an integral role in the company’s future by investing in its strategic vision and contributing to its future growth and development.
Essadi highlighted the strategic importance of the issue in boosting the company’s capital base and enabling it to pursue its long-term growth objectives, urging shareholders to seize the chance to participate in the company’s growth plans and contribute to its continued success.
Essadi further revealed that the funds generated from the share offer will be utilised to repay the company’s outstanding foreign and local currency-denominated debts, a move that is expected to significantly reduce the company’s exposure to foreign exchange risks and revaluation losses.
By eliminating these risks, Essadi explained that Nigerian Breweries will be better positioned to enhance its long-term profitability and create sustainable value for its shareholders, underscoring the strategic importance of the share offer in supporting the company’s financial health and future success.
Also speaking, Olutade Olaegbe, Vetiva Advisory Services Limited managing director lauded the Nigerian Breweries leadership team for their foresight and dedication in pursuing the share offer.
Olaegbe praised the company’s executives for demonstrating strong leadership and a clear focus on creating value for shareholders by implementing a strategic plan that addresses the company’s financial challenges and positions it for future growth.
Olaegbe expressed his gratitude to Nigerian Breweries for entrusting his firm, together with Stanbic IBTC Capital Limited, with the advisory role on this groundbreaking transaction.
The Vetiva Advisory Services Limited MD also praised Nigerian Breweries for its confidence in their expertise and assured them that their joint efforts would result in a successful share offering that will serve as a benchmark for other multinational companies seeking to raise capital through the equity markets.