Nigerian Breweries Plc Starts ₦599bn Rights Issue

Nigerian Breweries Plc, one of the leading brewing companies in Nigeria, has announced the launch of a ₦599.1 billion rights issue following the approval of its shareholders in April 2024.

This announcement comes after receiving clearance from the Securities and Exchange Commission (SEC) and NGX Regulation Limited to proceed with the rights issue aimed at bolstering the company’s financial strength.

As part of the rights issue, Nigerian Breweries will offer a total of 22,607,491,232 ordinary shares at a price of ₦26.50 per share. This offer will be available to shareholders whose names appear in the company’s register of members as of the qualification date of 12 July 2024. Eligible shareholders will have the opportunity to subscribe for 11 new ordinary shares for every five shares currently held.

The capital raise is a key element of Nigerian Breweries’ Business Recovery Plan, which seeks to strengthen the company’s capital base by deleveraging its balance sheet, eliminating foreign exchange-related exposures, and reducing its bank borrowings. This move will provide the company with greater financial flexibility, positioning it for sustained business growth and continuity.

Leading the execution of this transaction are Vetiva Advisory Services Limited as the Lead Issuing House, and Stanbic IBTC Capital Limited, serving as the Joint Issuing House. The rights issue is scheduled to open on 02 September 2024 and will close on 11 October 2024.

Speaking at the signing ceremony on 28 August 2024, Hans Essaadi, Managing Director of Nigerian Breweries, highlighted the significance of the rights issue for both the company and its shareholders. He emphasised that this represents a strategic opportunity for shareholders to contribute to the company’s future growth and profitability. Essaadi also noted that the funds raised will be used to settle foreign and local currency-denominated obligations, thereby mitigating foreign exchange risks and revaluation losses. This, in turn, will enhance long-term profitability and sustainable value creation for shareholders.

Olutade Olaegbe, Managing Director of Vetiva Advisory Services Limited, lauded the management of Nigerian Breweries for their visionary leadership in executing the rights issue. He expressed confidence that this landmark transaction would serve as a precedent for other global multinational companies to tap into equity capital markets to meet their strategic goals.

Full details of the rights issue, including the terms and conditions, will be outlined in a Rights Circular that will be sent directly to qualifying shareholders. The circular will include a provisional allotment letter and acceptance form, and shareholders are advised to consult their stockbrokers, fund managers, accountants, or other professional advisors for guidance before subscribing to the offer.

This rights issue marks an important milestone for Nigerian Breweries as it seeks to fortify its capital structure, mitigate financial risks, and sustain growth in the dynamic Nigerian business environment.