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By Chinwendu Obienyi
Shareholders of Nigerian Breweries Plc (NB) have unanimously approved capital raising of N600 billion by way of rights issue.
The shareholders gave the go ahead at the company’s 78th Annual General Meeting held in Lagos at the weekend.
This authorization grants the Board the mandate to execute capital restructuring via a rights issue, providing existing shareholders the opportunity to procure additional shares in proportion to their current holdings. The pricing of these shares will be determined by the Board, considering prevailing market conditions.
The Interim Chairman of the Board of Directors, Siep Hiemstra, during the Annual General Meeting, explained that 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.
According to Hiemstra, the objective of raising fresh capital to the tune of N600 billion is to enable the company 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.
He disclosed that the majority shareholders, Heineken, has already indicated its readiness to support the recapitalization exercise by taking up and paying for the portion of the shares allotted to it.
In his words, “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.”
Some of the shareholders who spoke at the meeting described the recapitalization exercise as a step in the right direction noting that it would have a considerable impact on the company’s business growth and performance.
Several shareholders lauded the recapitalization move as a prudent step forward, anticipating its positive impact on the company’s growth trajectory and performance.
The National Coordinator of the Progressive Shareholders Association of Nigeria, Boniface Okezie, commended the board and management for their proactive leadership amidst adversity.
In his remarks, the Managing Director/CEO, Nigerian Breweries Plc, Hans Essaadi, reiterated commitment to delivering long-term growth to its shareholders, despite the current economic headwinds and challenges.
“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,” he said.
