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N600bn right of issues will help steer NB Plc back to profitability—Shareholders



N600bn right of issues will help steer NB Plc back to profitability---Shareholders
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The shareholders’ associations in Nigeria have declared their support for plans by Nigerian Breweries Plc to raise N600 billion through Rights Issues, saying it would help steer the company back to profitability.

Recall that the company had earlier proposed a recapitalisation scheme by way of rights issue, and planned to seek its shareholders approval to raise fresh capital of up to N600 billion at its Annual General Meeting in Lagos.

According to the Managing Director/CEO of NB Plc, Hand Essaadi, the fund when raised would be used for payments of all overdue foreign exchange debts, eliminate forex exposure, and strengthen its balance sheet and liquidity position.

In separate statements, Boniface Okezie, National Coordinator, the Progressive Shareholders Association of Nigeria (PSAN), Bisi Bakare, National Coordinator, Pragmatic Shareholders Association (PSAN), and Moses Igbrude, National Coordinator, the Independent Shareholders Association of Nigeria (ISAN), declared their support for the Rights Issue.

READ ALSO: NB PLC proposes recapitalisation scheme, seeks shareholders’ approval to raise N600bn

On his part, Okezie regretted the headwinds that triggered the erosion of shareholders’ funds but expressed satisfaction with plans by the nation’s biggest brewer to return to profitability.

He said: “The Rights Issue is the way to go. Nigerian breweries need to rebuild their shareholders’ funds that were eroded by forex losses. The N600 billion proposed for Right Issues is going to fly as long as the foreign partner commits to take up their right when open.”

He urged Nigerian shareholders to embrace the offer, saying the strategic plans being put in place by the company would lead to a quick return to profitability.

“Nigerian shareholders should take up the offer because Nigerian Breweries will bounce back, I have seen the recovery plans being put in place by the company and I am convinced they will lead to recovery from the loss position of 2023. In addition to those plans, the company has good products and a vast huge market share that will help them recover even more quickly than most people expect,” Okezie added.

Bakare declared her association’s support for the Rights issue and expressed optimism that the offer would be over-subscribed at the end of the day.

The company’s revenue grew from N551 billion in 2022 to N600 billion in 2023 while the operating profit declined by 15 per cent from N53 billion in 2022 to N45 billion in 2023 due to higher cost and one-off reorganisation cost.

However, despite the strong and aggressive cost savings measures, the company recorded a net loss of N106 billion due to the impact of naira devaluation which resulted in foreign exchange loss of N153 billion, and interest  costs on loans and borrowing for capacity expansion.


The company also announced plans to suspend operations in two of its nine production plants in Nigeria as part of measures to deal with the harsh operating environment in Nigeria.

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