By Nkiruka Nnorom

LAGOS—Guinness Nigeria Plc has secured approval from the Securities and Exchange Commission, SEC, and the Nigerian Stock Exchange, NSE, to open offer for N39.7 billion Rights Issue to its existing shareholders.

The company is offering the rights to the shareholders on the basis of five new shares for every 11 shares previously held by shareholders, whose names appeared in the register of members of the company as at March 15, 2017, at an issue price of N58 per share.

The issue price represents a discount of 15 per cent to the company’s closing share price on March 14, 2017, being the last day prior to the announcement of the proposed Rights Issue by the NSE.

Guinness Nig Plc

The proceeds of the offer will support the company in executing its strategy in the context of ongoing external economic challenges.

Speaking at the signing ceremony, Peter Ndegwa, Managing Director, Guinness Nigeria Plc, said: “This Rights Issue will allow the company to deliver on its strategic objectives and give all our shareholders a unique opportunity to increase the number of shares they hold.

“Our expectation is that funds raised will help mitigate the impact of increasing finance costs, optimize our balance sheet and improve the company’s financial flexibility.”

In his comment, Babatunde Savage, Chairman, Guinness Nigeria Plc, said the process was part of the company’s long term plans to continue to invest in its business in Nigeria.

“We have been here in Nigeria for 67 years and while it has been challenging in recent times for many Nigerian 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 other stakeholders up to this point.”

Last year, Guinness Nigeria Plc became the first total beverage alcohol company in Nigeria by acquiring the rights to distribute international premium spirits such as Johnnie Walker whisky and Baileys liqueur.

It later commissioned a N4.7billion spirits line for locally manufactured spirits at its Benin plant.

Stanbic IBTC Capital Limited is acting for Guinness Nigeria Plc as Issuing House for the Rights Issue.