Rédaction Africa Links 24 with Agency Report
Published on 2024-04-04 05:11:20
Nigerian Breweries Plc is planning to raise up to N600 billion through a rights issue to address challenges brought about by the Naira devaluation and high borrowing costs, as per a notification sent to the Nigerian Exchange Ltd. (NGX) by the Company Secretary, Uaboi Agbebaku. The aim of this initiative is to strengthen the company’s balance sheet and alleviate the debt burden, highlighted by a net loss of N106 billion in 2023. The decision was reached at a special meeting of the Board of Directors held on Tuesday.
The Board has decided to recommend this course of action to shareholders at the upcoming annual general meeting scheduled for 26 April. The funds raised from the rights issue are expected to help reduce the company’s significant debt burden and improve its balance sheet. Together with ongoing cost-saving measures and operational efficiency efforts, the Board is optimistic about steering the company towards sustainable profitability in the near future.
Managing Director/Chief Executive Officer of Nigerian Breweries Plc, Hans Essaadi, views the rights issue as the first step in the company’s strategic recovery plan for business continuity and future growth. Despite implementing various mitigating actions, factors such as the accelerated devaluation of the Naira, limited access to hard currency, and high-interest rates have exerted significant pressure on the company’s net profit, prompting the need to reduce debt and repair the balance sheet.
Essaadi emphasizes that the rights issue will enable Nigerian Breweries to pursue its strategic objectives and align with its recovery plan. Additionally, it presents shareholders with a unique opportunity to increase their stake in the company. The ultimate goal is to sustain value for stakeholders and restore the business to profitability.
Nigerian Breweries’ long-standing presence in Nigeria, spanning over 77 years, reflects its belief in the country’s long-term growth potential. The company remains committed to making a positive impact on host communities and consumers, leveraging its robust supply chain network, efficient route-to-market strategy, and diverse portfolio of beverage brands across the Lager, Stout, non-alcoholic malt, soft drinks, and energy drinks categories.
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