Nigerian Breweries (NB) Plc is injecting about N600 billion in its business because of its positive view of Nigeria’s long-term economic potential.
NB, Nigerian subsidiary of Heineken H.V., is offering 22.61 billion ordinary shares of 50 kobo each to existing shareholders at N26.50 per share. The rights issue opened on September 2, 2024, and will close on Friday, October 11, 2024.
Heineken H.V has expressed full commitment to the rights issue, which shares have been pre-allotted on the basis of 11 new shares for every five held at the close of business on July 12, 2024.
Managing Director, Nigerian Breweries (NB) Plc, Hans Essaadi, said the company believes that notwithstanding the current economic challenges, the prospects for the Nigeria’s economy remains bright.
He explained that the group had incurred substantial foreign exchange (forex) losses due to its recent expansion, but the business future outlook remains strong.
“These are tough times for our business. We started expanding our facilities two years ago, for which forex commitments were required, with a view to future-proofing the business. This led to our incurring a substantial debt due to the devaluation of the naira.
“Despite this challenge amongst others, we believe that investing in Nigeria is the right thing to do as the long-term fundamentals remain strong,” Essaadi said.
He said the net proceeds from the rights issue would be used to offset overdue forex commitments, thereby repositioning the company for optimum business performance that will enable it to deliver value for its stakeholders.
Speaking during a “Facts Behind the N599.1 Billion Rights Issue” presentation at the Nigerian Exchange, Essaadi pointed out that the losses recorded in its financial statements was due mainly to the impact of the currency devaluation on forex-denominated payables and higher interest expenses.
He assured shareholders that the rights issue will return the company to the path of net profitability and the resumption of dividend payments as soon as possible.
He added that the company is in a position to take advantage of an improvement in the macroeconomic operating environment.
According to him, the company’s expansion into the wine and spirits category through the acquisition of Distell Wines and Spirits Nigeria Limited was in furtherance of its commitment to grow sustainable value for its shareholders.
Chief Executive Officer, Nigerian Exchange (NGX), Jude Chiemeka, said the Exchange provides platform to support enhanced transparency and stimulate engagement in the capital markets.
He explained that sharing timely and accurate data is essential for driving market activity, as it strengthens trust and fosters greater participation.
He acknowledged the efforts of the NB’s leadership in enhancing operations, promoting business continuity, and restoring investor confidence amidst economic challenges.
He pointed out that NB’s commitment to business sustainability goals reflects the resilience and adaptability that are essential in today’s market environment.
Company Secretary & Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku, stated that the proceeds from the rights issue will be used to eliminate all outstanding forex payables so that the company will no longer be subject to the vagaries of devaluation.
“A major part of the proceeds will be utilised for the repayment of overdue forex obligations while the remaining will be used to repay and lower local naira debt obligations, thereby reducing the interest burden on the company,” Agbebaku said.
