Nigerian Breweries Plc, the largest brewery in Nigeria, has announced plans to N600 billion through a rights issue, with the primary objective of clearing its N500 billion foreign exchange debt burden.
This initiative was unveiled by Uaboi Agbebaku, the company’s secretary and legal director, during a pre-annual general meeting press conference held in Lagos.
Agbebaku stated that Nigerian Breweries is committed to implementing a comprehensive company-wide reorganization strategy to ensure a resilient and sustainable future for all stakeholders.
“The additional capital raised via rights issue will be utilized to settle all overdue foreign exchange debts and payables, effectively eliminating foreign exchange exposure,” Agbebaku explained.
He further highlighted the importance of strengthening the company’s balance sheet and liquidity position to restore profitability in the shortest possible time frame.
Hans Essaadi, the managing director and CEO of Nigerian Breweries, echoed Agbebaku’s sentiments, acknowledging the challenging operating environment characterized by factors such as double-digit inflation rates, currency devaluation, and foreign exchange challenges.
Essaadi emphasized the urgency of addressing these issues to mitigate their adverse impact on the company’s financial performance.
To achieve its objectives, Nigerian Breweries intends to leverage the support of its majority shareholder, Heineken Plc, which has committed to contributing over 50 percent of the N600 billion fundraising target.
This partnership underscores the strategic importance of the rights issue in revitalizing Nigerian Breweries’ financial health and positioning it for sustainable growth.
As part of its broader business restructuring efforts, Nigerian Breweries had previously announced plans to temporarily suspend operations at two of its nine breweries.
Sade Morgan, the director of corporate affairs at Nigerian Breweries, explained that the company is committed to executing its 2024 business recovery plan, which comprises cost management, operational optimization, and portfolio innovation.
“Our strategy for success in 2024 revolves around strong cost management, operational efficiency, and the introduction of exciting innovations to delight our customers,” Morgan stated.
“We remain dedicated to our employees, communities, and stakeholders as we navigate through these challenging times.”
With the proposed rights issue, Nigerian Breweries aims to not only alleviate its foreign exchange debt burden but also to fortify its financial resilience and drive sustainable growth in the dynamic Nigerian market.