Shareholders of Guinness Nigeria PLC, Nigeria’s second largest brewer have approved its requests to execute a rights issue to save the company from its dwindling financial fortunes.
Guinness Nigeria has been badly hit by the Nigeria’s economic recession, Naira (NGN) devaluation and tough compatition in the alcoholic beverage category.
Ats its extra ordinary general meeting held earlier today, Babatunde Savage, Chairman, Guinness Nigeria Plc told shareholders that “We believe this Rights Issue will positively impact on the financial performance of Guinness Nigeria and help mitigate the impact of increasing finance costs in what continues to be a challenging economic environment in Nigeria. I call on all my fellow shareholders to take this opportunity and support the company’s objectives.”
Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc said the “Rights Issue in combination with our productivity and cost optimization drive will help provide the fuel to continue to build this business for Nigeria and Nigerians.”
Guinness has taken several steps to raise funds to shore up its balance sheet which has been in the red for three consecutive quarters. Last year, the company lobbied Diageo, its parent company to acquire more stake in the business. The invitation was rejected for apparent reasons.
Guinness has also explored options of exporting some of its top line brands to other African countries to gain Forex and increase margin.
The coming months will show the level of commitments its shareholders show to the rights issue.