Champion Breweries Plc plans to raise about N12 billion from its shareholders as the company moves to recapitalise its operations and optimise production capacity.
Champion Breweries plans to issue 6.30 billion ordinary shares of 50 kobo each through a rights issue to existing shareholders on the basis of seven new ordinary shares for every one share they held as at May 7. The company has indicated it plans to sell the rights issue at N1.85 per share.
The Nigerian Stock Exchange (NSE) confirmed receiving application for the rights issue, which is expected to kick off before the end of this quarter.
The rights issue’s price represents a substantial discount to the company’s market price of N13.79 on the NSE. The discount is in line with the traditional view of rights issue as a form of return to shareholders.
The huge discount provides opportunity for existing shareholders who want to fully or partially renounce their rights to trade such renounced shares on the NSE.
The management of Champion Breweries had earlier indicated that the company would soon overcome its challenge of capital inadequacies with the planned recapitalisation.
The recapitalisation, according to the management, would enable the company to maintain and sustain the production of premium quality beer and non-alcoholic beverages that meet international brewing standards through the deployment of cutting-edge technology and application of human capital.
The Raysun Nigeria Limited, a wholly owned subsidiary of Heineken International BV, became the new core investor in Champion Breweries following the sale of 513 million ordinary shares of 50 kobo each by Consolidated Breweries Plc, the previous core investor in Champion Breweries.
This story first appeared in TheNation
Intense competition is obviously driving the beer market into mergers and acquisition as well as increase in new capital. Make no mistakes about it, this competition is between Heineken, SABMILLER and Diageo. The three top beer makers will slug it out to the end for a huge piece of the Nigerian market.