Guinness Nigeria explains N40 billion rights issue
Guinness Nigeria Plc, Tuesday, announced that the net proceeds of the N40 billion rights issue will help the company repay outstanding loan obligations, improve its operational and financial flexibility.
Already, the company had received regulatory approvals from the Securities and Exchange Commission (SEC), and Nigerian Stock Exchange (NSE), to raise about N39.701billion by way of rights issue to its existing shareholders.
A total of 684,494,631 ordinary shares of 50 kobo each will be offered to existing shareholders in the ratio of five new ordinary shares for every eleven ordinary shares held by those whose names appeared on the register of members of Guinness Nigeria at the close of business on Wednesday, March 15, 2017.
The issue price is N58 per share, with Stanbic IBTC Capital Limited as the issuing house to the offer, which opened on Monday July 24, and will close on Wednesday August 30.
At its Extra-ordinary General Meeting in January 2017, shareholders had authorised the Board of Directors to proceed with the Issue.Addressing shareholders during the ‘Facts Behind the Issue’ in Lagos on Tuesday, the Managing Director, Peter Ndegwa, explained that the rights issue would allow Guinness Nigeria to deliver on its strategic objectives, and give shareholders a unique opportunity to increase their shareholding in the company.
Furthermore, the funds raised will help it mitigate the impact of increasing finance costs, optimise its balance sheet, and improve the company’s financial flexibility.
He pointed out that the parent company; Diageo, which owned 54.3 per cent shareholding in Guinness Nigeria, has expressed a willingness to take its portion of the rights in full, to ensure success of the rights issue.
Ndegwa explained that the company is now focused on value creation as well as growing skills that would help develop the brand. “We are not setting up another factory but to review our distribution strategy, and set up relationship with suppliers to improve efficiency.”
Also speaking at the occasion, the company Chairman, Babatunde Savage, said the rights issue is part of the company’s long term plans to continue to invest for profitability.
“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.”
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.