CHIGOZIE AMADI
Shareholders of Nigerian Breweries Plc have unanimously approved the bid to raise N600 billion capital by way of rights issue, at the 78th Annual General Meeting (AGM) of the company in Lagos.
With this development, the board has the authorisation to undertake capital restructuring by way of a rights issue.
This will give 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.
Nigerian Breweries recorded a net loss of N106 billion for the year ended 2023, as against N13.93 billion posted in its 2022 financials, indicating a rise by 860 per cent in the company’s loss.
The Company Secretary, Nigerian Breweries, Mr. Uaboi Agbebaku, stated this in the audited financial result of the company for the year ended 2023 sent to the Nigerian Exchange Ltd. (NGX).
Agbebaku said the gross profit of the company for the year under review also fell by 0.3 per cent to N212.5 billion, compared to N213.20 billion posted in the previous year.
He stated that the operating profit of the company declined by 15.3 per cent to N45 billion, as against N53 billion recorded in the corresponding year.
The company secretary said that the firm recorded loss in its operating profit due to higher input cost and one-off reorganisation cost despite strong and aggressive cost savings and other efficiency measures.
Speaking at the AGM, Nigerian Breweries interim Chairman, Board of Directors, Mr Siep Hiemstra, explained that the decision to seek approval for the capital raising was in line with the company’s commitment to improving its financial position.
Hiemstra said that the company also desires to return its business to profitability while creating value for the shareholders.
According to him, the objective of raising fresh capital to the tune of N600 billion is to enable the company to settle its outstanding foreign exchange payables as well as part of the local bank facilities.
Hiemstra noted that this 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.
The chairman disclosed that the majority shareholders, Heineken, have already indicated their readiness to support the recapitalisation exercise by taking up and paying for the portion of the shares allotted to it.
Hiemstra said: “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.
“Prioritising 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.
In his remarks, the Managing Director/CEO, Nigerian Breweries Plc, Mr Hans Essaadi, appreciated the shareholders for their support, noting that the company remains committed 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,” Essaadi said.
