Naira devaluation: Nigerian Breweries to raise N600bn through rights issue
Nigerian Breweries Plc has announced that it would be raising up to N600bn via Rights Issue.
In a corporate notice filed with the Nigerian Exchange Limited on Wednesday, which was signed by its Company Secretary, Uaboi G. Agbebaku, it was revealed that the decision to raise capital was made at the Board of Directors meeting held on Tuesday.
Part of the notice read, “The board resolved to recommend to shareholders at the next Annual General Meeting the raising of up to N600bn capital by way of Rights Issue, subject to regulatory approvals.
“Due to the negative impact of the devaluation of the naira and the high cost of funds on the company’s capital structure, especially on the company’s debts, the proceeds from the Rights Issue will help to reduce the huge debt burden arising thereby leading to a healthier balance sheet.
“Coupled with ongoing cost savings and other operational efficiency efforts, the board is optimistic about steering the company back to the path of sustainable profitability in the near future.”
Another resolution that the board would be seeking shareholders’ approval for at its next AGM scheduled for later this month would be an increase in the company’s share capital to take care of the new shares to be allotted under the Rights Issue.
Nigerian Breweries Plc, in its audited results for the year ended December 2023, announced that it suffered a N153bn foreign exchange loss due to the devaluation of the naira.
For the period under review, the company grew its revenue by 8.9 per cent to N599.64bn from N550.64bn. Net finance expense rose significantly by 449.7 per cent to N189.19bn, dragging the brewer to a loss of N106.31bn, from a gain of N13.19bn at the end of 2022.
While lamenting about the macroeconomic headwinds, the NB board of directors expressed a preparedness to tap into its decades of experience operating in Nigeria to weather the current economic climate.
“In a difficult operating environment, the Board will ensure that the Company builds on its more than 77 years of experience of operating in Nigeria to cope with current realities.
“The company will continue to be resilient and forward-thinking leveraging our broad portfolio, strong supply chain footprint, and passionate workforce to drive long-term value creation for its shareholders and other stakeholders”, the board said.
