By Modupe Gbadeyanka
Chief Executive Officer of Guinness Nigeria, Mr Peter Ndegwa, has disclosed that an application for an approval for a share sale to raise 39.7 billion naira from the capital market has been sent to the Nigerian Stock Exchange (NSE).
Mr Ndegwa told Reuters on Wednesday that, “Our expectation is that this rights issue will help mitigate the impact of increasing finance costs, optimise our balance sheet and improve the company’s financial flexibility.”
He expressed optimism that the exercise would help Guinness Nigeria back to profitability in the long term.
Guinness Nigeria is the local division of the world’s leading spirit maker, Diageo, and during the exercise, it expects to issue the shares to existing shareholders at N58 each, a 21 percent discount to Wednesday’s market price. Shareholders would be offered five new shares for every 11 held.
The company, which is 54 percent owned by Diageo, reported in September last year a pretax loss of N2.35 billion for the year ended June 30, its first annual loss in 30 years, triggering the share sale.
Guinness Nigeria shares, which have fallen 18 percent so far this year, rose 2.9 percent to N70 on the Lagos bourse on Wednesday. The stock fell 31 percent last year.
