By Modupe Gbadeyanka
The management of Guinness Nigeria Plc has explained why it was raising N40 billion through rights issue.
Yesterday, at the presentation of a detailed breakdown of its plans to raise N39,700,688,598 by way of rights issue to its existing shareholders, the brewery firm said a total of 684,494,631 ordinary shares of 50 kobo each would be offered to existing shareholders in the ratio of five new ordinary shares for every 11 ordinary shares held by shareholders whose names appeared on the register of members of the company at the close of business on Wednesday, 15 March, 2017.
It disclosed that the issue price is N58 per share, while Stanbic IBTC Capital Limited is the issuing house, and the offer, which opened on Monday, July 24, 2017, will close on Wednesday, August 30, 2017.
The Facts Behind the Issue, which was held at the Nigerian Stock Exchange (NSE), Lagos, was attended by a cross section of stakeholders including shareholders, fund/portfolio managers, regulators, auditors, issuing houses and registrars.
Guinness Nigeria said the net proceeds of the issue, already approved by the Securities and Exchange Commission (NSE) and the NSE, will help the company repay outstanding loan obligations, improving the operational and financial flexibility of the Company.
At its Extra-ordinary General Meeting in January 2017, shareholders of the company had authorized the Board of Directors to proceed with the Issue.
Commenting, Mr Peter Ndegwa, MD of Guinness Nigeria Plc said: “This Rights Issue will allow the Company to deliver on its strategic objectives and give all our shareholders a unique opportunity to increase their shareholding in the company. 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.”
Mr Babatunde Savage, Chairman, Guinness Nigeria Plc, stated that this process is part of the company’s long term plans to continue to invest and return to profitability, commenting “We have been 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 various other stakeholders up to this point.”
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.
Investors should 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.
Adedapo Adesanya