NIGERIA – International Breweries Plc (IB Plc), a subsidiary of AB InBev, has announced a rights issue offering of 161,172,395,100 shares at an offer price of N3.65 per share.
This strategic move is designed to strengthen shareholder equity and drive future profitability for the company.
The rights issue offers six new ordinary shares for every one ordinary share held by a shareholder on the record date of May 2nd, 2024. Each share carries an equity value of two kobo and is priced at N3.65 per share. The offer period is open from May 21st to June 10th, 2024.
“We are excited to announce this rights issue offering, which provides a compelling opportunity for our shareholders to further participate in the company’s growth and success,” said David Tomlinson, Finance Director of IB Plc.
“The attractive offer price and generous rights ratio aim to give our shareholders access to additional equity at a valuable rate.”
According to Tomlinson, this offering reflects the company’s commitment to creating value for its shareholders and solidifying its position within the Nigerian beverage industry. He encouraged all shareholders to participate in the rights issue and contribute to the company’s continued success.
The rights being offered are tradable on the floor of the Nigerian Exchange Limited for the duration of the rights issue, ensuring liquidity and accessibility for shareholders.
This tradability feature allows shareholders the flexibility to sell their rights on the open market if they choose not to participate directly in the offering.
The decision to launch the rights issue follows shareholder approval received in February 2024. The company plans to utilize the proceeds from the rights issue to reduce its debt burden (deleverage).
During a February Extraordinary General Meeting (EGM), shareholders expressed anticipation for the rights issue, viewing it as an opportunity to acquire more shares and support the company’s debt repayment efforts, which they believe will contribute to future growth.
Despite the challenging economic landscape, IB Plc has remained resilient, continuously implementing measures to transform its fortunes into a profitable enterprise admired by its shareholders.
Recently, IB Plc announced an increase in the prices of its beer and other stock-keeping units (SKUs) due to escalating operational costs. This price adjustment, effective June 1, 2024, is a response to inflationary pressures impacting the business.
In a memo addressed to its business partners, IB Plc cited inflationary pressures as the primary reason for the price adjustments. The memo, signed by Olaleye Abimbola, the company’s head of sales, outlined the need for the new pricing structure to adapt to current market realities.
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