The Nigerian Breweries Plc has explained the reasons for its ongoing rights issue of N599 billion in the nation’s bourse.
Mr Hans Essaadi, the Managing Director/Chief Executive Officer of Nigerian Breweries, said this at the company’s ‘Facts behind the offer’ at the Nigerian Exchange Limited in Lagos.
Essaadi noted that the major reasons for the ongoing rights issue was to clear its foreign exchange exposure and local debts.
He said the company had been battling foreign exchange losses, as the country continued to struggle with dollar scarcity.
Essaadi said the capital raise would enable the company to offset its huge debt burden, both foreign and local, which had affected its profitability.
The additional capital raised via the rights issue would be used for payments of all overdue foreign exchange debts and payables, eliminate foreign exchange exposure, and strengthen the company’s balance sheet and liquidity position, returning it to the path of net profitability as soon as possible,” he added.
He said the company’s majority shareholder, Heineken Plc, had committed to raising over 50 per cent of the rights issue.
“The tough business landscape characterised by double-digit inflation rates, naira devaluation, foreign exchange challenges, and diminished consumer spend has taken its toll on many businesses, including ours,” he said.
The managing director explained that the company had decided to consolidate its business operations for efficient cost management to ensure sustainable growth.
He added that the capital raise would fortify Nigerian Breweries’ financial position by reducing its debt, foreign exchange risks, and enhance overall business resilience.
He, however, assured shareholders that the company would return to profitability at the completion of the rights issue.
NB is offering 22.61 billion ordinary shares of 50k each to existing shareholders at N26.50 per share.
The shares have been pre-allotted on the basis of 11 new ordinary shares for every five ordinary shares held as at the close of business on July 12, 2024.
The rights issue which opened on September 2, 2024 would close on October 11, 2024.
Earlier in his address, the Chief Executive Officer, Nigeria Exchange Ltd. (NGX), Mr Jude Chiemeka, commended Nigerian Breweries for using the platform to present its financial performance, operational updates and strategic plans for its rights issue.
Chiemeka stressed the need for timely and accurate data was essential for driving market activity, as it strengthened trust and fostered greater participation.
He said that in the face of ongoing economic challenges, NGX acknowledged the commendable efforts of the company’s board and management in enhancing operations, promoting business continuity and restoring investors’ confidence.
“Your dedication to these goals reflects the resilience and adaptability that are essential in today’s market environment.
“I, therefore, use this opportunity to invite Nigerian Breweries Plc and all stakeholders to leverage the benefits of listing on the Exchange, including improved access to capital, increased global profile and access to liquidity,” he said.
Also speaking, Mr Boniface Okezie, the National Coordinator, Progressive Shareholders Association of Nigeria, enjoined shareholders to pick up their rights.
Okezie, however, charged the management of the company to ensure that it returns to profitability for dividend payment.
He noted that the company had been known for regular payment of dividend in the years past before its current foreign exchange challenge
