Nigerian Breweries Plc announced that it would raise about N600 billion through a rights issue.

In a corporate statement presented to the Nigerian Exchange Limited on Wednesday, signed by its company secretary, Uaboi Agbebaku, it was revealed that the decision to raise capital was taken at the board of directors meeting held on Tuesday.

Part of the notice read: “The board has decided to recommend to shareholders at the next Annual General Meeting to raise capital of up to N600 billion through rights issue, subject to regulatory approvals.

“Due to the negative impact of the devaluation of the naira and the high cost of funds on the company's capital structure, especially on the company's debts, the proceeds from the rights issue will help reduce the resulting huge debt burden, thereby leading to a balanced healthier. Coupled with continued cost savings and other operational efficiency efforts, the board is optimistic about leading the company back on the path to sustainable profitability in the near future.”

Another resolution that the board would seek approval from shareholders at its next General Meeting scheduled for later this month would be an increase in the company's share capital to take care of the new shares to be allotted under the rights issue.

The brewery suffered a foreign exchange loss of N153 billion due to the devaluation of the naira in 2023.

During the period under review, its revenues grew by 8.9 percent to N599.64 billion from N550.64 billion.

Net financial expenses increased significantly by 449.7 percent to N189.19 billion, dragging the brewery to a loss of N106.31 billion from a gain of N13.19 billion in 2022.

While lamenting the macroeconomic headwinds, the company's board of directors expressed its preparedness to leverage its decades of experience operating in Nigeria to weather the current economic climate.

“In a difficult operating environment, the board will ensure that the company leverages its over 77 years of operating experience in Nigeria to address current realities. The company will continue to be resilient and forward-thinking, leveraging our broad portfolio, strong supply chain presence and passionate workforce to drive long-term value creation for its shareholders and other stakeholders,” he stated.