Nigerian Breweries Plc is set to raise N599.1 billion through a rights issue on the Nigerian Exchange Limited (NGX) to tackle its financial challenges. The company will offer 22.6 billion shares at 50 kobo each, priced at N26.50 per share, allowing existing shareholders to buy 11 new shares for every five held.
During the “Facts Behind the Rights Issue” presentation at the NGX, Uaboi Agbebaku, the Company Secretary, outlined that the funds will be used to settle N328 billion in foreign exchange (FX) debts and N263 billion in local obligations. This move aims to eliminate FX losses and reduce the company’s interest burden amidst Nigeria’s high 26% Monetary Policy Rate (MPR).
Nigerian Breweries has faced significant financial challenges, including an N85.3 billion loss after tax in the first half of 2024, driven by inflation, FX costs, and operational expenses. Shareholders have urged the company to adopt strategies to mitigate future FX risks, such as backward integration and increased investment in R&D.
Hans Essaadi, Managing Director, acknowledged the impact of Nigeria’s economic volatility but expressed optimism for future improvements. He highlighted that Heineken, the parent company, has suspended interest on foreign loans to ease the financial strain.
Essaadi also noted the company’s recent acquisition of Distell Nigeria, which expands its portfolio into wines, spirits, and ready-to-drink segments, aiming to boost profitability. NGX CEO Jude Chiemeka commended Nigerian Breweries for its efforts to stabilize and grow, inviting stakeholders to benefit from the Exchange’s capital access and increased market profile.
