We’re raising N588bn in Rights Issue to settle foreign debt – International Breweries

 25th May 2024

International Breweries Plc has said that the N588.27 billion it plans to raise through Rights issue will be used to settle its dollar-denominated loan and mitigate foreign exchange volatility impacts.

The Managing Director of International Breweries, Carlos Coutino revealed this during a presentation of the company’s “Facts Behind the Rights Issue” to capital market stakeholders at the Nigerian Exchange Limited (NGX) in Lagos.

According to him, “The rights issue will address the short-term liquidity support through financing working capital.” Coutino further explained that converting the debt via the rights issue would reduce FX exposure, enhance cash flow, and support the company’s return to profitability.

The Securities and Exchange Commission (SEC) had recently approved the company’s plan to offer 161,172,395,100 ordinary shares at N3.65 per share to existing shareholders. The company noted that its existing shareholders could subscribe based on six new ordinary shares for every existing ordinary share held.

Despite facing challenges in Nigeria’s operating environment, Coutino reaffirmed the company’s commitment to the market, citing Nigeria’s promising demographics. “Nigeria will be the third most populous country of the world by 2050, according to the World Bank population data sheet and it has the second largest beer market in Africa with compelling outlook for beer consumption growth, underpinned by favourable population and median age.”

On his part, the Finance Director of International Breweries, David Tomlinson, highlighted the rights issue as a valuable opportunity for shareholders “To continue to invest in the success of the company, alongside ABInBev Group, its parent company.”

Tomlinson also shared impressive financial milestones, noting that the company’s revenue grew from N131.35 billion in 2019 to N218.65 billion in 2023. “This growth was driven by strong volume performance, positive brand mix, and disciplined revenue management,” he stated.

The Acting Chief Executive Officer of the NGX, Jude Chiemeka, lauded the company’s efforts to engage with the capital market community through the NGX platform. He emphasized the importance of such interactions for corporate governance and sustainable growth. “We will continue to adopt rules aimed at improving the corporate governance of our listed firms who would also offer products and services that are tailored to the needs of investors in a fair and orderly market,” Chiemeka stated.

SOURCE:THE SUN

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