Guinness Nigeria Plc, said on Wednesday it had sought approval from the Nigerian Stock Exchange (NSE) for a new share sale which it hopes would raise N39.77bn ($130m).

The company which has posted back-to-back losses in the last three quarters said it would issue the shares to existing shareholders at N58 per share, which represents a 17% discount on Wednesday’s closing of N70 per share. Existing shareholders would be offered five new shares for every 11 held as of Wednesday closing.

Guinness Nigeria’s shareholders through its board had approved a rights issue in January 2017 to raise N40bn new equity funds from existing shareholders.

“This rights issue in combination with our productivity and cost optimization drive will help provide the fuel to continue to build this business for Nigeria and Nigerians,” Peter Ndegwa, CEO/MD of Guinness Nigeria said.

Diageo, the parent company of Guinness Nigeria had decided in October not to increase its stake in Guinness Nigeria by 15.7%, citing adverse market conditions in Nigeria as the reason.

Instead, it loaned Guinness Nigeria $95m to help bridge dollar shortage caused by a decline in oil price.

Diageo said it intends to participate in the rights issue by converting its outstanding dollar loan granted to Guinness Nigeria into equity. Diageo is Guinness Nigeria’s largest shareholder with a 54.3% stake in the company. Diageo believes the debt/equity swap would be beneficial considering the relative weakness of the naira.

Also, in the event of an under-subscription from shareholders who do not participate, Diageo has the opportunity to acquire additional shares and increase its stake in Guinness Nigeria.