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Nigerian Breweries Raises N15bn to Fund Operations Nigerian Breweries Raises N15bn to Fund Operations

Economy

Nigerian Breweries Raises N15bn to Fund Operations

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By Dipo Olowookere

In order to raise capital to support its short-term funding needs, the management of Nigerian Breweries Plc has decided to sell commercial papers worth N15 billion to investors.

It was gathered that the brewery giant is issuing two separate series of its N100 billion commercial paper programme.

Business Post learnt that the series 1 of the CP programme has a 90-day maturity, while the series 2 has a 182-day tenor.

Also, while the series 1 has an effective yield of 11.59 percent and maturing on July 22, 2019, the series 2 has an effective yield of 14.43 percent maturing on October 22, 2019.

According to information gathered, Nigerian Breweries has opened offers for both series and should close on Thursday, April 18, 2019.

Nigerian Breweries has faced stiff competitions from other brewery brands in the market, especially from those also listed on the Nigerian Stock Exchange (NSE) like Guinness Nigeria, International Breweries and others.

In its 2018 financial statements, the company explained that its performance was affected by the new excise duty regime introduced by the federal government in mid-2018, which raised the amount collected from alcohol producing companies in the country.

This was evident in the gross earnings of the firm last year, which dropped to N324.4 billion from N344.5 billion in 2017.

Since the hike in excise duty last year, the company has not increase prices of its products, ostensibly because of competitors and the low purchasing power of consumers as a result of the economic situation of the country.

In the end, Nigerian Breweries closed 2018 fiscal year with a profit before tax of N29.4 billion against N46.6 billion in 2017 and a profit after tax of N19.4 billion in contrast to N33 billion in 2017.

With the raising of N15 billion through this commercial paper, the brewery company is hoping to improve its operations in order to boost its performance in the present financial year.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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  1. Pingback: Nigerian Breweries Raises N15bn to Fund Operations – MONEYINAFRICA

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