Nigerian Breweries Extends Rights Issue Deadline Following SEC Approval

Nigerian Breweries Plc has announced the extension of its ongoing Rights Issue acceptance period, now set to close on October 18, 2024, instead of the original deadline of October 11.

The extension, approved by the Securities and Exchange Commission (SEC), was made to accommodate public holidays that interrupted normal working days during the initial subscription period, which began on September 2, 2024.

Recently, in an official statement signed by the company’s Secretary, Mr. Uaboi Agbebaku, Nigerian Breweries emphasized the need to give shareholders sufficient time to participate in the Rights Issue.

“The extension allows us to accommodate the normal working days impacted by public holidays observed during the initial Acceptance Period,” the statement read.

Despite the extension, restrictions on insider trading remain in effect. Insiders may only participate in the Rights Issue in compliance with NGX’s non-dealing period rules, given the company’s unaudited financial statements for the period ended September 30, 2024.

Nigerian Breweries is aiming to raise N599.1 billion through the Rights Issue, offering 22.6 billion ordinary shares at N26.50 per share. Shareholders are entitled to buy 11 new shares for every five they currently hold. The funds will be used to address significant financial obligations, including N328 billion in foreign exchange (FX) debt and N263 billion in local repayments.

During a recent ‘Facts Behind the Rights Issue’ presentation in Lagos, Mr. Agbebaku explained that settling these debts is essential to eliminating FX losses from the company’s balance sheet and reducing its interest burden on local debts. With Nigeria’s 26 percent Monetary Policy Rate (MPR) worsening these financial pressures, Nigerian Breweries aims to alleviate the strain by reducing both foreign and local obligations.

The company has faced substantial financial challenges in 2024, including a reported loss after tax of N85.3 billion in the first half of the year, driven by inflation, FX costs, operational expenses, and broader economic pressures. Mr. Agbebaku stressed that clearing these debts would help stabilize Nigerian Breweries’ profit and loss accounts while easing the company’s interest burdens, which have significantly impacted its financial performance.