Application Opens for International Breweries N164bn Rights Issue

By Dipo Olowookere

Shareholders of International Breweries Plc who intend to participate in the N164.4 billion rights issue of the company have till Tuesday, December 24, 2019 to do, the Nigerian Stock Exchange (NSE) has announced.

A circular issued by the stock market regulator said application for the exercise opened on Thursday, December 5, 2019 and is mainly for investors who had shares of the cement company in their portfolio as at the close of business on Wednesday, November 6, 2019.

Business Post reports that International Breweries is offering for sale to its existing shareholders a total of 18,266,206,614 ordinary shares of 50 kobo each at N9.00 per unit on the basis of 17 new ordinary shares for every 8 ordinary shares.

In the circular released by the stock exchange, it was stated that stocks being offered for the rights issue have been registered by the Securities and Exchange Commission (SEC) as SR/IBP/2019/00088.

The raising of fresh capital from this exercise is to enable International Breweries expand its operations and further increase its market share in the beer industry in Nigeria and add more value for its investors.

In 2018, the brewery giant commissioned a $250 million factory in Sagamu, Ogun State to support its growth plan. However, policies of government have made things difficult for the firm as well as the sector.

Players in the beer sector in the country are still struggling to find life as a result of the introduction of a new excise duty, which has made it difficult for them to make profit and increase prices to capture the raise in tax on alcohol.

In order to help the situation on ground, about two months ago, shareholders of the company at an Extraordinary General Meeting (EGM) in Lagos, authorised the board to raise fresh funds through the rights issue by passing a resolution for the exercise.

“That, subject to obtaining the approval of the relevant regulatory authorities, the directors be and are hereby authorized to raise additional capital of up to N165,000,000,000.00 by way of a rights issue of ordinary shares to the company’s shareholders (Rights Issue) and that the rights issue be executed at such price, time and on such other terms and other conditions as the directors may deem fit,” they authorised.