Guinness Nigeria Plc Tuesday received the approval of its shareholders for a proposed N40 billion Rights issue.
The decision was reached at the company’s Extra-Ordinary General Meeting (EGM) attended by local shareholders and representatives of international shareholders in Lagos.
Babatunde Savage, Chairman, Guinness Nigeria Plc, said the shareholders’ approval would enable the company raise up to N40bn as fresh cash injection into the business operations.
“Guinness Nigeria has been in this country for over 60 years and, in that time, we have continued to add significant economic and social value to Nigeria and Nigerians,” Mr. Savage said.
“We believe this Rights Issue will positively impact on the financial performance of Guinness Nigeria and help mitigate the impact of increasing finance costs in what continues to be a challenging economic environment in Nigeria.”
Guinness Nigeria Plc, which is a subsidiary of Diageo plc, had announced at the end of 2016, its intention to offer a Rights Issue as part of plans to optimise its balance sheet and improve its financial flexibility.
The announcement came as the company recorded an overall Loss After Tax of N2 billion for the period ended June 30, 2016, its first loss in three decades.
Compared with its records a year earlier, in 2015, Guinness Nigeria Plc posted a Profit After Tax of N7.7 billion.
The company had blamed its 2016 performance on “very tough economic challenges,” the effect of the government’s forex policy, and the devaluation of the Naira.
Speaking at the EGM on Tuesday, Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc, said he is optimistic about the company’s potentials for the future.
““Guinness Nigeria is a company with excellent fundamentals and we have the right strategy and the right people to grow our business for the future,” said Mr. Ndegwa.
“This Rights Issue in combination with our productivity and cost optimization drive will help provide the fuel to continue to build this business for Nigeria and Nigerians.”
Last year, Guinness Nigeria Plc became the first total beverage company in Nigeria when it acquired rights to distribute international premium spirits like Johnnie Walker and Baileys in Nigeria in January 2016.
In November, the company commissioned a spirits line for locally manufactured spirits at its Benin plant.
This week, the company is also expected to release its first half results for the 6-month period ended 31st December 2016.