Nigerian Breweries Shareholders Approved N600b Fundraising Plan

The Nigerian Breweries (Plc) shareholders have unanimously approved the firm’s capital raising of N600 billion by way of a rights issue to existing shareholders.

With this development, the Board are now authorized to commence capital restructuring by way of a rights issue that will grant all the company’s shareholders the opportunity to acquire more shares in proportion to their holdings, at a price determined by the board taking into consideration the market conditions.

While speaking at the 78th yearly general meeting of the company held in Lagos at the weekend, the Interim Chairman, Siep Hiemstra, said the decision to seek approval for the capital raising is in line with the company’s commitment to improving its financial position and returning the business to profitability while creating value for the shareholders.

Hiemstra explained that the objective of raising fresh capital to the tune of N600 billion is to enable the company to settle its outstanding FX payables as well as part of the local bank facilities, which would lead to the elimination of the naira devaluation risk or foreign exchange losses as well as the reduction of huge interest burden on the company.

According to Hiemstra, "Following the challenging year 2023, and the present volatility of the Nigerian business environment, we are focused on our strategic recovery plan backed by parent company Heineken, prioritizing efficiency and agility in all areas of operations; and maintaining market leadership through its rich portfolio of brands. We will continue to demonstrate resilience to deliver value for shareholders and all stakeholders."

The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, applauded the company on its business recovery plan, saying there was no better time to make such an audacious move as this would help to significantly improve the company’s performance.

He said, “We believe in the leadership of Nigerian Breweries and we are certain that soon enough, we will reap the benefits of these bold decisions.”

In his remarks, the Managing Director/CEO of Nigerian Breweries, Hans Essaadi, also commended the shareholders for their support, stating that the company remains committed to delivering long-term growth to its shareholders, despite the current economic headwinds and challenges.

He said, “While we cannot influence the external environment, we are committed to maintaining resilience in the face of adversity. We are confident that the company will remain in a good position to weather the storm. We will sustain a strong cost management culture; optimize our operational footprint; and leverage our strong brand portfolio, exciting innovations and route to consumers to win in the market."