Guinness Nigeria N40bn rights issue: Fact behind the issue
Guinness Nigeria Plc yesterday presented a detailed breakdown of its plans to raise N39,700, 598 by way of rights of issue to its existing shareholders. The company shared details of its rights issue programmer at a presentation which was held at the Nigerian Stock Exchange, Lagos. The event was attended by a cross section of stakeholders including: shareholders, fund/portfolio managers, regulators, auditors, issuing houses and registrars.
A total of 684,494,631 ordinary shares of 50 kobo each will be offered to existing shareholders in the ratio of five new ordinary shares for every eleven ordinary shares held by shareholders whose names appeared on the register of members of the Company at the close of business on Wednesday, 15 March 2017. The issue price is N58 per share. Stanbic IBTC Capital Limited is the issuing house to the offer which opened on Monday 24 July, 2017 and will close on Wednesday 30 August, 2017.
The net proceeds of the Issue, already approved by the Securities and Exchange Commission and Nigerian Stock Exchange, will help the company repay outstanding load obligations, improving the operational and financial flexibility of the Company. At its extra-ordinary General Meeting in January 2017, shareholders of the company have authorized the Board of Directors to proceed with the issue.
Commenting, Peter Ndegwa, MD of Guinness Nigeria Plc said:
"This Rights Issue will allow the company deliver on its strategic objectives and give all our shareholders a unique opportunity to increase their shareholding in the company. Our expectation is that funds raised will help mitigate the impact of increasing finance costs, optimise our balance sheets and improve the Company's financial flexibility."
Babatunde Savage, Chairman, Guinness Nigeria Plc. stated that this process is part of the Company's long term plans to continue to invest and return to profitability commenting "We have been in Nigeria for 67 years and while it has ben challenging in recent times for many Nigeria 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 various other stakeholders up to this point"
Stanbic IBTC Capital Limited is acting for Guinness Nigeria Plc as Issuing House for the Rights Issue. Full terms of the Rights Issue will be set out in a Rights Circular to be mailed directly to shareholders of the Company, which contains a Provisional Allotment Letter and the Participation Form.
Investors should read the Rights Circular and where in doubt consult their Stockbroker, Fund/Portfolio Manager, Accountant, Banker, Solicitor or any other professional advisor for guidance before subscribing.