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HomeBusinessNigerian Breweries closes bid for N25 bln Commercial Paper today

Nigerian Breweries closes bid for N25 bln Commercial Paper today

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By Samuel Bankole

The local unit of Dutch brewer Heineken, Nigerian Breweries, said it would wrap up bids for its N25 billion commercial paper today, Wednesday, in which it’s seeking to raise funds to support the company’s short-term working capital and other funding needs.

In a regulatory filing with the Nigerian Exchange Limited (NGX), it said the issuance of the paper has been open since Friday, April 28, and it is expected to close on Wednesday, May 3.

The regulatory communication was signed by the company’s secretary, Uaboi Agbebaku, and released by the NGX on its website on Tuesday.

Nigerian Breweries Plc is pleased to inform the investing public of the continuation of its Commercial Paper (“CP”) Program with the launch of Series 4, 5, and 6 of the CP Program that opened on April 28, 2023, and closes on May 3, 2023.

“Series 4 is for a tenor of 95 days (with an implied yield of 12.5 percent), Series 5 for 186 days (with an implied yield of 13 percent), and Series 6 for 228 days (with an implied yield of 14 percent).

“The minimum subscription is N5 million and multiples of N1,000 thereafter. The company aims to raise up to about N25 billion to support the company’s short-term working capital and funding needs under these series.

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“The CP Program continues to provide an additional opportunity for existing and new investors to invest in the company as well as support the company’s cost management initiatives and serve as an additional source of funding for the company,” the company said in the regulatory communication.

Last month, the company said it would seek shareholders’ approval for a loan of €110 million from its parent company, Heineken International, at its forthcoming annual general meeting (AGM).

According to the company’s Finance Director, Ben Wessels Boer, NB plans to deploy the facility to defray some foreign loans and outstanding debt to IBECOR and the buying agent.

Boer said foreign exchange losses had a major impact on the company’s profitability in 2022 while adding that it would settle its long-overdue payables to IBECOR and Heineken International via a €110 million loan and would need shareholders’ approval for the loan.

“We expect that if it is approved, we can already get the loan in May 2023, and basically, we will use that, and indeed, it is enough to pay the overdue to our buying agent and all the full-denominated debts.”

“We also have some debt that is not foreign-denominated, which includes dividends to Heineken and also royalties.” “We are not using this debt to repay those, but it is for the foreign-denominated debt that we will pay and also for machinery because that part of course is critical for our business continuity,” Boer said.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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