Guinness Nigeria Plc has opened application list for its ₦39.7 billion rights issue, paving the way for shareholders to pick up their rights. The rights are also being traded on the automated trading system at the Nigerian Stock Exchange.
Application list for the rights issue opened on July 24, 2017 and will close on August 30, 2017. The opening of application list followed the clearance of the issue documents by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) and the endorsement of the offer documents by all relevant parties.
Guinness Nigeria is offering 684.49 million ordinary shares of 50 kobo each at ₦58 per share to existing shareholders on the basis of five new shares for every 11 shares held as at the close of business on March 15, 2017.
The offer price of ₦58 per share is a discount of 12.25 per cent on the company’s share price of ₦66.10 on the opening date. The discount allows shareholders to trade their renounced shares at the NSE and realise the premium on the offer price.
Diageo Plc, United Kingdom, the majority core investor in Guinness Nigeria, is expected to inject additional ₦21 billion in Guinness Nigeria by subscribing for its rights. The rights issue provides another window for Diageo to inject capital into the Nigerian subsidiary after the multinational backed down from its earlier proposal to acquire additional equity shares in Guinness Nigeria.
Diageo had withdrawn from its plan to acquire additional shares of up to 15.7 per cent in Guinness Nigeria from minority shareholders citing the challenging market conditions in Nigeria. Diageo had in September 2015 announced that it was considering acquiring 15.7 per cent equity stake in Guinness Nigeria through its wholly owned subsidiary, Guinness Overseas Limited.
Managing Director, Guinness Nigeria Plc, Peter Ndegwa, said the net proceeds of the new capital raising will support the company in executing its strategy in the context of ongoing external economic challenges.
According to him, the rights issue will allow the company to deliver on its strategic objectives and give all its shareholders a unique opportunity to increase the number of shares they hold.
“Our expectation is that funds raised will help mitigate the impact of increasing finance costs, optimise our balance sheet and improve the company’s financial flexibility,” Ndegwa said.
Chairman, Guinness Nigeria Plc, Babatunde Savage, said that the supplementary new issue 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,” Savage said.
Last year, 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 and later commissioning a ₦4.7 billion spirits line for locally manufactured spirits at its Benin plant.