‘To reduce debt’ — Nigerian Breweries to raise N600bn through rights issue

Nigerian Breweries (NB) Plc says it will raise N600 billion through rights issue to reduce its debt burden.

This was disclosed in a statement signed by Uaboi Agbebaku, the company secretary on Wednesday.

Nigerian Breweries said the board of directors will make the recommendation to the company’s shareholders during its annual general meeting scheduled for April 26, 2024.

According to the company, the proceeds from the rights issue will help reduce its debt burden, resulting in a healthier balance sheet.

“Nigerian Breweries Plc (“NB” or “the Company”) hereby informs the Nigerian Exchange Limited and the investing public that at a specially convened meeting of the board of directors of the company held on the 2nd of April 2024, the board resolved to recommend to shareholders at the next annual general meeting (“AGM”), the raising of up to N600 billion capital by way of rights issue, subject to regulatory approvals,” Nigerian Breweries said.

“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.”

Nigerian Breweries said the board also resolved to recommend an increase in the company’s share capital to take care of new shares under the rights issue.

Meanwhile, on February 13, the company announced an upward review in the prices of some products in its stock-keeping units (SKUs) to mitigate the impact of the rising cost of input.

This followed a net loss of N106 billion in 2023, largely induced by the impact of the devaluation of the naira on its foreign exchange transactions.

The company disclosed this in its audited results for the period ended December 31, 2023.

Nigerian Breweries said its reaction to the challenges presented by the tough economic terrain was centred around reducing risk to the business by focusing on a positive price mix, efficient sales operations, strong and aggressive cost management, and other efficiency measures.