Shareholders of Nigerian Breweries Plc on Friday unanimously approved N600 billion capital raise by way of rights issue, at the 78th Annual General Meeting (AGM) of the company in Lagos.
With this development, the Board now has the authorisation to undertake capital restructuring by way of a rights issue.
This will enable 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.
The News Agency of Nigeria(NAN) reports that 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 decline of 860 per cent.
Mr Uaboi Agbebaku, Company Secretary, Nigerian Breweries, 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 can not 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 consumer to win in the market,” Essaadi said.
Some of the shareholders who spoke at the meeting described the recapitalisation exercise as a step in the right direction, noting that it would have a considerable impact on the company’s business growth and performance.
The National Coordinator, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, stated that there was no better time to make such an audacious move, as this would help to significantly improve the company’s performance.
Okezie expressed profound appreciation to the board and management for providing exceptional leadership, which had led to its resilience amid adversity.
“We believe in the leadership of Nigerian Breweries and we are certain that soon enough, we will reap the benefits of these bold decisions.”
A member of the Heineken Group, Nigerian Breweries Plc, is Nigeria’s pioneer and largest brewing company. Incorporated in 1946 as Nigerian Brewery Ltd.
