International Breweries is firming up plans to clear the heap of losses that have accumulated over the past years, which have kept retained earnings negative since 2019.
The core of the strategy is a share capital reduction, which the beer maker hopes to implement after securing shareholders’ approval at its forthcoming annual general meeting, as disclosed in a statement on Thursday.
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“The company is proposing to reconstruct the company’s share capital by way of 1) eliminating negative retained earnings; and 2) the return of excess capital,” International Breweries stated in a note to the Nigerian Exchange.
“The transaction will be executed pursuant to the provisions of Section 131 of the Companies and Allied Matters Act, 2020 (as amended), subject to the appropriate regulatory approval and confirmation by the Federal High Court,” it added.
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Shares in the brewer accelerated by 10 per cent, the maximum daily gain allowed by the bourse, at market close following the announcement.
The company, Nigeria’s second-largest brewer, reported its first profit in seven years last year, following the takeover by new majority shareholder AB InBev in 2016.
The diluting impact of legacy negative net losses from entities that merged to form a larger International Breweries under the new ownership, combined with foreign exchange losses from a dollar squeeze during the Covid-19 pandemic and the far-reaching consequences of Nigeria’s currency reforms in the four years to 2024, exacerbated the company’s difficulties between 2017 and 2025.
Accumulated losses, which reached ₦191 billion last year, have been a significant barrier to dividend payments. To address this, the company announced it is looking to allocate part of the balance in its share premium account to clear these losses. This move will place the company on track to restore distributable reserves and improve its prospects of declaring cash rewards for shareholders.
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Once it clears its balance sheet of the negative retained earnings, International Breweries will consider further paring down the cash in the share premium account to facilitate a return of capital to shareholders, the company said.
“The amount payable per ordinary share will be distributed on a pro rata basis, determined with reference to the total amount approved by the Board of Directors for distribution from the share premium account,” it added.
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