SEC approves International Breweries 161bn share rights issue

International Breweries has received approval from the Securities Exchange Commission for its proposed Rights Issue, offering 161.17 billion Ordinary Shares valued at 588.279 billion naira. This move aims to raise funds and pave the way for future profitability. The brewer plans to offer six new ordinary shares for every share held by existing shareholders, reflecting their commitment to the Nigerian market and their confidence in its growth potential. International Breweries engaged with key stakeholders in the Nigerian equities market to address concerns and provide insights regarding the rights issue and the company's future trajectory. The approval from the Securities Exchange Commission marks a significant milestone for International Breweries as they seek to raise substantial funds through the Rights Issue. The offer of 161.17 billion Ordinary Shares at an offer price of 3.65 naira per share represents a strategic move to enhance the company's capital structure and address historical debt challenges. By involving existing shareholders in the rights issue, International Breweries aims to strengthen its financial position and work towards sustainable profitability, ultimately leading to potential dividend payments in the future. The Rights Issue comes as a part of International Breweries' strategy to navigate volatile market conditions and capitalize on the opportunities present in Nigeria. With the backing of majority shareholder AB InBev, the brewer is poised to leverage their resources and expertise to drive growth and value creation for shareholders. The focus on backward integration of raw materials and SKU optimization demonstrates the company's commitment to enhancing profitability and operational efficiency. Stakeholders in the Nigerian equities market have raised questions about issues such as foreign currency loan exposure, dividend payments, and the success of the rights issue. International Breweries has addressed these concerns by underlining the importance of the rights issue in mitigating obstacles to profitability, particularly the impact of foreign currency exposure on the company's performance. The brewer has carefully structured the rights issue to retire its foreign denominated loan, signaling a proactive approach to managing financial obligations and reducing dollar exposure. The commitment to financial prudence and sustainable growth is evident in International Breweries' decision to size the rights issue to cover existing liabilities and ensure prudent capital management. By focusing on resolving historical challenges and aligning their capital structure with long-term profitability goals, the company aims to instill confidence in shareholders and position itself for future success in the Nigerian market. The Rights Issue represents a critical step towards stability and growth for International Breweries, underscoring their resilience and determination to overcome obstacles and deliver value to stakeholders.