NIGERIA – Nigerian Breweries Plc has announced that it seeks to raise up to US$41.64 million (N15 billion) in the third and fourth series under its N100 billion Commercial Paper (CP)
According to a statement issued by the firm to the Nigeria stock exchange, the company said that the funds are being raised to support its short-term funding requirements, reports NairaMetrics.
“In addition to providing an opportunity for non-equity investors to invest in the Company, the CP programme continues to support the Company’s cost management initiatives with the overall aim of reducing its cost of fund.
“The CP also serves as an additional source of funding for the Company,” the company said in a statement.
Earlier this year, the company had successfully concluded the Series 1 and 2 of its renewed US$277.78 million (N100 billion) CP programme.
The funding follows the company’s board decision to pay out the entire net profit of US$53.89 million recorded in 2018 as cash dividend to shareholders for the financial year amid a decline in performance of the company.
Both the series 3 and 4 commercial papers have a tenor 91 days and 172 days respectively.
The brewer unveiled the US$277.78 million Commercial Paper programme to enable the firm complement other sources of working capital, while diversifying its funding sources to include non-bank investors.
Last year, the company also approved a US$27.5 million seven-year loan from the Bank of Industry Limited (BoI) in addition to a US$13.3m working capital over a period of three years.
According to the company, the programme aims to improve the company’s ability to periodically access funding at rates mirroring the money market and treasury yields.
Nigerian Breweries net revenue slipped by 5.8% in 2018 to US$900 million from US$958.33 million in the previous year while its net profit declined by 41% to US$53.89 million from US$91.67 million in 2017.
The company has hence unveiled that it would be deploying some innovations nationwide to drive market demand.
The company’s management has also committed to strengthening partnership with its business associates going into the future.
The Managing Director, Nigerian Breweries Plc, Mr. Jordi Borrut Bel notes that the company would be piloting new initiatives that would bring flexibility and comfort into how customers make their orders.
He said the initiative is based on the conviction that it would enable the company increase efficiency.