Guinness Nigeria opens subscription for N39.7bn rights issue

Brewing giant Guinness Nigeria Plc, on Tuesday unveiled application for subscription of its proposed N39.7bn ($126m) rights issue.

The company’s officials were at the Nigerian Stock Exchange (NSE) to present a detailed breakdown of the offer of 684.5m ordinary shares to Guinness Nigeria current shareholders to raise N39.7bn.

The company reiterated that the offer will close on Wednesday, 30th August 2017, and has an issue price of N58 per share, a 12.25% discount on the company’s share price of N66.10 on the opening date.

Existing shareholders would be offered five new shares for every 11 shares held as of close of business on 14 March 2017.

L-R Chief Executive, Stanbic IBTC Capital, Funso Akere; Executive Director, Capital Markets, Nigeria Stock Exchange, Haruna Jalo-Waziri; Chairman, Guinness Nigeria Plc, Babatunde Savage and Managing Director, Guinness Nigeria Plc, Peter Ndegwa; at the facts behind the Issue at the NSE to announce Guinness Nigeria’s N40bn Rights Issue in Lagos on Tuesday, July 25, 2017.

L-R Chief Executive, Stanbic IBTC Capital, Funso Akere; Finance and Strategy Director, Guinness Nigeria Plc, Ron Plumridge; Corporate Relations Director, Guinness Nigeria Plc, Viola Graham-Douglas; Executive Director, Capital Markets, Nigeria Stock Exchange, Haruna Jalo-Waziri; Managing Director, Guinness Nigeria Plc, Peter Ndegwa and Chairman, Guinness Nigeria Plc, Babatunde Savage at the closing gong ceremony to announce Guinness Nigeria’s N40bn Rights Issue at the NSE in Lagos on Tuesday, July 25, 2017.

Diageo Plc, the majority shareholder in Guinness Nigeria with a 54.3% stake has indicated interest in participating in the rights issue by converting its outstanding dollar loan granted to Guinness Nigeria into equity. Diageo is also expected to inject additional N21bn in Guinness Nigeria by subscribing for its rights.

Diageo had in September 2015 indicated interest in acquiring additional 15.7% stake in Guinness Nigeria following the announcement of the big beer merger between AB InBev and SABMiller. However, in October 2016, it rescinded the offer citing adverse market conditions in Nigeria over the past 12 months.

The Managing Director, Guinness Nigeria Plc, Peter Ndegwa, said the net proceeds of the capital raising will support the company in executing its strategy in the context of ongoing external economic challenges.

“Our expectation is that funds raised will help mitigate the impact of increasing finance costs, optimise our balance sheet and improve the Company’s financial flexibility,” Ndegwa said.

Babatunde Savage, Chairman, Guinness Nigeria Plc, stated that the process was part of the Company’s long term plans to continue to invest and return to profitability.

“We have been in Nigeria for 67 years and, while it has been challenging in recent times for many Nigerian businesses, we remain committed to this market as evidenced by our decision to offer this Rights Issue,” the chairman said.

Guinness Nigeria is one of the leading firms involved in the production and marketing of alcoholic beverages in the country. The group’s products consist beers, spirits, ready-to-drinks, and malted drinks.

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