…Records 91.59% Subscription Rate
Nigerian Breweries Plc has announced that it has received clearance from the Securities and Exchange Commission (SEC) for the allotment of 20,706,894,542 ordinary shares of 50 Kobo each, priced at N26.50 per share, under its recently concluded Rights Issue.
This was contained in the company’s notice to the Nigerian Exchange Limited seen by THE WHISTLER.
According to the statement, the Rights Issue recorded a 91.59 per cent subscription rate.
According to the company, the shares will be credited to the Central Securities Clearing System (CSCS) accounts of successful allottees who provided their account details on their acceptance forms.
This process will be executed by the company’s registrar, First Registrars & Investor Services Limited, no later than Wednesday, December 18, 2024.
For subscribers who provided surplus funds, refunds will be processed by the First Registrars within the same timeframe, ensuring all surplus subscription monies are returned promptly.
Applicants without CSCS accounts will also have their shares credited through the creation of a Registrar Identification Number (RIN), in compliance with the SEC’s directive on the dematerialization of share certificates.
The management of Nigerian Breweries Plc had said that it is raising N599.1bn through a rights issue on the Nigerian Exchange Limited (NGX) to address its financial obligations.
The company is offering 22.6 billion ordinary shares at 50 kobo each, priced at N26.50 per share, allowing shareholders to buy 11 new shares for every five held.
Speaking to the capital market community at the company’s “Facts Behind the Rights Issue” presentation in Lagos, the Company Secretary, Nigerian Breweries, Mr. Uaboi Agbebaku, stated that the proceeds will be used to clear the company’s payables, including N328bn in foreign exchange (FX) debts and N263bn in repayments of local obligations.
Agbebaku stressed that the move is aimed at eliminating FX losses from the company’s balance sheet and reducing its interest burden on local debts, amid Nigeria’s 26 per cent Monetary Policy Rate (MPR).
“Our FX losses are substantial, and clearing these obligations will stabilize our profit and loss accounts. We are also working to reduce local bank debts. The impact of that also is that it will eventually reduce the interest burden that we are carrying, which has been a significant financial strain,” Agbebaku stated.
Nigerian Breweries faced a challenging financial period, posting a loss after tax of N85.3bn for the first half of 2024, mainly due to rising inflation, FX costs, operating expenses, and broader economic headwinds.
Concerned about the company’s health, shareholders urged the company to mitigate future FX risks by exploring forward-looking strategies, including backward integration and increased investment in research and development to reduce dependence on imported raw materials.
The Company’s Managing Director, Hans Essaadi, noted that while the company was ramping up efforts in areas possible to return to profitability, Nigeria’s volatility and the broader economic challenges were impacting its performance.
Nigerian Breweries Secures SEC Approval For 20.7 Billion Share Allotment is first published on The Whistler Newspaper