Nigerian Breweries Plc to raise $502 million to support growth

Nigerian Breweries Plc, a subsidiary of Heineken N.V, said it plans to sell N100 billion ($502 million) in debt to raise cash to support its growth plans even as lower oil prices is slowing consumer spending in the country.

The debt sale, which is expected by Oct. 8, will enable the company to diversify its funding and attract non-bank investors, Finance Director, Mark Rutten said in an e-mailed statement. The move demonstrates the Heineken N.V unit’s commitment to Nigeria, where it owns 11 breweries, Managing Director, Nicolaas Vervelde said.

The fundraising comes at a time the country is beset by economic headwinds – lower oil prices, which has slowed consumer spending and created government budget deficits. Nigerian Breweries reported a lower half-year profit in July, while its smaller and closest rival, Guinness Nigeria Plc said earlier this month that the economic situation had reduced the consumption of premium beer brands.

Nigerian Breweries shares rose 0.7 percent to N148 naira as of 1:40 PM in Lagos. The company’s stock has declined 10 percent this year, compared with an 11 percent drop in the 179 memberr Nigerian Stock Exchange All-Share Index. Guinness Nigeria Plc, a subsidiary of Diageo Plc, has also seen its stock decline by 4.9 percent this year.

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