Guinness Nigeria to Float N39.7 Billion Rights Issue
Following shareholder’s approval, Guinness Nigeria Plc has received clearance of the issue documents from the Securities and Exchange Commission (SEC) and approvals from the Nigerian Stock Exchange (NSE) to raise additional N39, 700,688,598 by way of rights to existing shareholders.
The allotment will be on the basis of five new shares for every 11 shares held by shareholders, whose names appeared in the register of members of the Company as at 15 March 2017 at an issue price of N58 per share.
According to the company, the funds raised will support the firm in executing its strategy in the context of ongoing external economic challenges. The issue price represents a discount of 15 per cent to the company’s closing share price on 14 March 2017, being the last day prior to the announcement of the proposed rights issued by NSE.
The Managing Director of the company, Peter Ndegwa explained that the rights issue will allow the company to deliver on its strategic objectives and give shareholders a unique opportunity to increase the number of shares they hold. He expressed optimism that funds raised would help mitigate the impact of increasing finance costs, optimize the balance sheet and improve the company’s financial flexibility.
The Chairman of the company, Babatunde Savage, stated that the process is part of the company’s long term plans to continue to invest in its business in Nigeria.
“We have been here 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 other stakeholders up to this point.”
He explained that Guinness Nigeria became the first total beverage alcohol company in Nigeria by acquiring the rights to distribute international premium spirits like Johnnie Walker whisky and Baileys liqueur in Nigeria last year with the commissioning a N4.7 billion spirits line for locally manufactured spirits at its Benin plant.
The company, according to him, has also been a champion for community development recently. Leveraging its flagship ‘Water of Life’ scheme, the company has delivered 35 water facilities across 24 states in Nigeria.
He noted that 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, while urging investors to 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.
Stanbic IBTC Capital Limited is acting for Guinness Nigeria Plc as Issuing House for the rights issue.