Olufemi Adeyemi 


Nigerian Breweries Plc, a prominent player in Nigeria's beverage manufacturing sector, has officially launched its much-anticipated Rights Issue. This strategic financial initiative involves the issuance of 22,607,491,232 Ordinary Shares, each valued at N0.50, at a price of N26.50 per share, totaling ₦599,098,517,648 billion.

The company is offering 22.61 billion ordinary shares, each valued at 50 kobo, to existing shareholders at a price of N26.50 per share. The shares have been allocated based on a ratio of 11 new ordinary shares for every five ordinary shares held as of the close of business on Friday, July 12, 2024.

The acceptance list for this rights issue commenced on Monday, September 02, 2024, and will conclude on Friday, October 11, 2024.

The board announced that the rights issue was launched following the approval from the Securities and Exchange Commission (SEC).

Heineken N.V., based in the Netherlands and the majority stakeholder in NB, is anticipated to invest at least N341 billion in the company through this rights issue, which has pre-allocated approximately 12.9 billion ordinary shares to the multinational corporation.

Market analysts have suggested that Heineken N.V., which has demonstrated a strong interest in the Nigerian market, may increase its investments to over N400 billion.

Mr. Sijbe Hiemstra, a representative of Heineken, indicated that the multinational is prepared to commit an initial investment of up to N342 billion in new equity for its Nigerian subsidiary.

During the annual general meeting of NB held at the Muson Centre in Onikan, Lagos, shareholders authorized the board to pursue a N600 billion rights issue as part of a capital restructuring strategy aimed at enhancing the company’s financial standing.

Heineken, which possesses a 57 percent majority equity stake in NB, has expressed its readiness to exercise its allotted rights. Market experts noted that the provision for additional allotment enables Heineken to acquire more shares, referencing the multinational’s history of increasing its equity stake in NB through secondary acquisitions.

Hiemstra, the former Regional President for Africa and the Middle East at Heineken, stated that the majority shareholder, Heineken, has expressed its willingness to support the recapitalization initiative by acquiring and financing its designated share allocation. Typically, rights issues are pre-allocated based on current shareholdings.

During the annual general meeting, Hiemstra elaborated that the move to seek approval for capital raising aligns with the company's dedication to enhancing its financial standing and restoring profitability while generating value for shareholders.

He noted that the goal of raising N600 billion in new capital is to facilitate the settlement of outstanding foreign exchange payables and to address part of the local bank obligations.

According to him, restructuring the balance sheet will mitigate the risks associated with naira devaluation and foreign exchange losses, as well as alleviate the significant interest burden on the company.

“After a challenging year in 2023 and amid the current volatility in the Nigerian business landscape, we are committed to our strategic recovery plan, supported by our parent company Heineken. We are prioritizing efficiency and agility across all operational areas while maintaining market leadership through our diverse brand portfolio. We will continue to show resilience in delivering value to shareholders and all stakeholders,” Hiemstra remarked.

Nigerian Breweries Plc has a rich history of providing reliable returns to its shareholders. The capital generated from this Rights Issue will play a crucial role in advancing the company’s strategic goals, which encompass enhancing production capacity, expanding the distribution network, and promoting sustainability initiatives.

As a leading brand in Nigeria, Nigerian Breweries Plc consistently showcases its dominance in the beverage sector, positioning itself to seize growth opportunities while ensuring value creation for its shareholders.