Companies
Nigerian Breweries receives shareholders’ approval for N600 billion rights issue
As part of the resolutions at its Annual General Meeting (AGM), the board of Nigerian Breweries Plc has received shareholders’ approval for a N600 billion rights issue.
In a statement seen by Nairametrics in Nigerian Breweries’ Sixth Resolution, the brewer noted,
“That subject to obtaining the approval of the relevant regulatory authorities, the Directors of the Company be and are hereby authorised to raise capital of up to ₦600 billion (six hundred billion naira) by way of Rights Issue, through the issuance of ordinary shares, on such other terms and conditions and at such time, as the Directors may deem fit or determine.”
Recall that after a board meeting on April 3, 2024, the Board of Directors of Nigerian Breweries had announced a decision to raise N600 billion through a rights issue programme. The move became necessary due to the company’s burgeoning debt and ailing balance sheet.
Part of the statement from the board meeting had read,
- “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.”
As part of full approval, the board received shareholders’ approval to increase the share capital of the company. And it was resolved that shares not subscribed to by current shareholders within the specified timeframe for the rights issue could be acquired by other interested investors.
Resolutions 7 and 8 read,
- “That shares not taken up by existing shareholders within the period stipulated under the Rights Issue may be offered to shareholders of the Company that have indicated interest in purchasing additional shares not taken up by the shareholders entitled to do so in the Rights Issue, on such terms and conditions as may be determined by the Directors, subject to complying with relevant regulatory requirements.”
- “That the share capital of the Company be increased by the exact number of ordinary shares which would be required upon determination of the terms of the Rights Issue and the Directors are hereby authorised to pass resolutions for such increase, as well as to allot the new ordinary shares upon completion of the Rights Issue.”
What you should know
- Nigerian Breweries is currently going through a significant challenge, as the group looks to restructure its operation to attain healthier balance sheets. Earlier in the month, it was announced that the group was looking to suspend operations in two of its nine plants in Nigeria.
- The Naira devaluation of 2023 put the group’s finances in a hassle, as it posted a net loss of N106.3 billion, effectively wiping its retained earnings.
