Guinness Nigeria Plc Begins N40b Rights Issue

July 4, 2017
Guinness Nigeria Plc Begins N40b Rights Issue

Guinness Nigeria Plc Begins N40b Rights Issue

By Modupe Gbadeyanka

Reports reaching us indicate that Guinness Nigeria Plc has now received clearance of the issue documents from the Securities and Exchange Commission (SEC) and approvals from the Nigerian Stock Exchange (NSE) to list the new Guinness Nigeria shares on the NSE.

This followed approval received in January from shareholders of the firm on the exercise.

A statement issued by Guinness Nigeria today disclosed that the funds raised will support the brewery company in executing its strategy in the context of ongoing external economic challenges.

Guinness Nigeria plans to raise a total of N39.7 billion by way of rights to existing shareholders, on the basis of 5 new shares for every 11 shares held by shareholders, whose names appeared in the register of members of the Company as at March 15, 2017 at an issue price of N58 per share.

The issue price represents a discount of 15 percent to the company’s closing share price on March 14, 2017, being the last day prior to the announcement of the proposed rights issue by the NSE.

Managing Director of Guinness Nigeria Plc, Mr Peter Ndegwa, was quoted in the statement as saying that, “This Rights Issue will allow the company to deliver on its strategic objectives and give all our shareholders a unique opportunity to increase the number of shares they hold.

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

On his part, Chairman of Guinness Nigeria Plc, Mr Babatunde Savage, stated that this process is part of the firm’s long term plans to continue to invest in its business in Nigeria.

“We have been here 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.

“We are grateful for the support that we have received from our shareholders and other stakeholders up to this point,” Mr Savage said.

Last year, Guinness Nigeria Plc became the first total beverage alcohol company in Nigeria by acquiring the rights to distribute international premium spirits like Johnnie Walker whisky and Baileys liqueur in Nigeria and later commissioning a N4.7billionspirits line for locally manufactured spirits at its Benin plant.

Guinness Nigeria Plc has also been a champion for community development recently. Leveraging its flagship ‘Water of Life’ scheme, the company has delivered 35 water facilities across 24 states in Nigeria. These facilities have helped provide clean drinking water for over 1.5 million Nigerians.

Stanbic IBTC Capital Limited is acting for Guinness Nigeria Plc as Issuing House for the Rights Issue. Full terms of the Rights Issue will be set out in a Rights Circular to be mailed directly to shareholders of the Company, which contains a Provisional Allotment Letter and the Participation Form.

The company has urged investors to read the Rights Circular and where in doubt, consult their Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor, or any other professional adviser for guidance before subscribing.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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