N600bn will help steer NB Plc back to profitability – Shareholders

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.

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.

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.