Nigerian Breweries Plc has received the green light from both the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX) to proceed with a significant capital-raising initiative. The company plans to generate N599.1 billion through a Rights Issue, a strategic move aimed at fortifying its financial standing.
The Rights Issue involves the offering of 22,607,491,232 Ordinary Shares, each with a nominal value of 50 kobo. These shares are available to shareholders who were on the company’s register as of the Qualification Date, July 12, 2024. Shareholders will have the opportunity to purchase eleven new Ordinary Shares for every five Ordinary Shares they currently hold, at a price of N26.50 per share.
This initiative is a key component of Nigerian Breweries’ Business Recovery Plan. The funds raised will be used to deleverage the company’s balance sheet, reduce its exposure to foreign exchange fluctuations, and lower bank borrowings. These steps are designed to provide the company with greater financial flexibility, promoting sustained business growth and continuity.
At the official signing ceremony in Lagos, Nigerian Breweries’ Managing Director, Hans Essaadi, emphasized that the Rights Issue represents a significant opportunity for shareholders to support the company’s strategic goals and benefit from its future growth. He noted that the proceeds would be directed towards settling both foreign and local currency obligations, thereby mitigating foreign exchange risks and enhancing long-term profitability for shareholders.
Olutade Olaegbe, Managing Director of Vetiva Advisory Services Limited, praised Nigerian Breweries’ leadership for their foresight in pursuing this initiative. He expressed confidence that the successful execution of this Rights Issue would inspire other multinational companies to explore equity capital markets to achieve their strategic objectives.
Vetiva Advisory Services Limited and Stanbic IBTC Capital Limited are serving as the Lead Issuing House and Joint Issuing House, respectively, for this transaction. The subscription period for the Rights Issue will open on September 2, 2024, and close on October 11, 2024.
Full details of the Rights Issue will be provided in a Rights Circular, which will be sent directly to qualifying shareholders. The circular will include a Provisional Allotment Letter and an Acceptance Form. Shareholders are advised to read the circular carefully and seek professional advice if needed before making any investment decisions.
This Rights Issue marks a pivotal moment for Nigerian Breweries as it seeks to strengthen its financial base and ensure sustainable growth in the coming years.
