Nigeria: Rights Issue - NB Set to Eliminate Forex Expenses, Reduce Bank Borrowings

18 September 2024
Vanguard (Lagos)
By Peter Egwuatu

The Nigerian Breweries, NB Plc, has explained that it plans to eliminate the Foreign Exchange (forex) related expenses and reduce bank borrowings with the proceeds from its ongoing N599.1 billion Rights Issue.

Speaking at the Company's fact behind the Rights Issue on the Lagos floor of the Nigerian Exchange, NGX, Limited yesterday, Mr. Hans Essadi Managing Director/CEO, NB Plc, stated: "The proceeds of the 22,607,491,232 ordinary shares of 50 kobo each will be channeled towards payment of its foreign and local currency denominated obligations, thereby eliminating foreign exchange risk and revaluation losses and enhancing long term profitability and sustainable value creation for its shareholders."

Continuing, he added: "In the 6 months ended 30 June 2024, Nigerian Breweries demonstrated resilience and is on the path to recovery as seen in the results delivered despite the challenging external environment characterized by high inflation and heightening operating costs. We have been delivering value to our customers in terms products and dividends to our shareholders since we listed on the Exchange in 1973."

Commenting on the performance of the Company, Ben Wessels Boer, NB's Finance Director, said: "As a leading total beverage alcohol company in Nigeria, we posted a 34% increase in operating profit for the half-year period ended 30 June 2024.

"Our revenue grew by 73% in the half-year, HI'24 compared to the same period in 2023. The growth was driven by strategic pricing, innovation volume growth, and market recovery. Cost of sales, distribution, and admin expenses increased by 46%, largely due to inflationary pressure and forex devaluation impacting imported materials. We also continue to invest behind our brands and categories and support the recovery of the market."

Speaking as well, Uaboi Agbebaku, Legal Director, NB PLc, said: "A total of 22,607,491,232 ordinary shares of 50 kobo each in the share capital of Nigerian Breweries are being offered to shareholders whose names appear in the register of members as of the Qualification Date being 12 July 2024.

In his welcome address, the Jude Chiemeka, CEO, NGX Limited, said: "The NB is a big brand with a market capitalisation of N294 billion, and has been in existence since 1946 and listed on the Exchange in 1973. The company is not new in our markets and our platform provides the facilities to raise funds for expansion among other things."

Read the original article on Vanguard.

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