International Breweries Plc, an alcoholic beverage maker has recorded the largest-ever equity issuance in Nigeria, boosting the Nigerian stock market capitalisation by N599 billion in 2024.
According to Chapel Hill Denham Advisory Limited, an independent investment banking firm in Nigeria, the brewers issued N516.2 billion in the first half of 2024.
“International Breweries Plc announced the completion of the N164.4 billion Rights Issue on Thursday, following receipt of the Securities & Exchange and Commission’s approval of the Basis of Allotment. This offer is Nigeria’s largest-ever Rights Issue and was 100 percent subscribed,” the firm said.
It added that the net proceeds will reduce the company’s leverage, thereby setting the brewer on the path to profitability after the landmark construction of the Gateway plant – the second-largest Brewery plant in Africa – costing over $250 million.
“We are delighted to have acted as the sole issuing house on the International Breweries Right Issues. The N516.2 billion rights issue is the largest-ever equity issuance in Nigeria and we believe the company is now better positioned for accelerated growth post this rights issue.
“The rights issue demonstrates our belief in the Company’s compelling equity story and the long-term prospects of the Company,” Kemi Awodein, managing director of Chapel Hill Denham Advisory Limited added.
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However, the Nigerian Stock Exchange (NGX) market capitalization settled at N54.05 trillion at the close of trading, and International breweries’ listing of 141.4 billion ordinary shares stood at N3.65 per share
In a statement by the brewer, the shares were the brewer’s rights issue offering of 161.17 billion ordinary shares, which was 87.75 per cent subscribed. With the new listing, the total issued and fully paid-up shares of International Breweries have risen from 26.86 billion to 168.29 billion shares.
“The Company has obtained approval from the Securities Exchange Commission to offer to the shareholders the proposed Rights Issue of 161.17 billion ordinary shares of 2 Kobo each at N3.65 per share, on the basis of six (6) new ordinary shares for every one (1) existing ordinary share held,” the statement said.
The qualification date for the Rights Issue is May 2, 2024. The application list opened on May 21, 2024, and will close on June 10, 2024, as approved by the Commission.
Commenting on the Rights Issue, a senior executive of International Breweries Plc, said: “Through the Rights Issue, the Company’s capital structure is expected to change as long-term debt is being replaced with equity, thereby easing the burden of interest payments, increasing management’s flexibility to take advantage of growth opportunities as well as eliminating volatility in earnings.”
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation decreased further from the preceding day’s 95,831.51 points and N55.047 trillion respectively to 95,718.05 points and N54.982 trillion.
