Reports reaching Nairametrics suggest Guinness Nigeria Plc is about to embark on a rights issue after announcing an Extraordinary General Meeting to approval the offer. We now understand the board approved the offer sometime last week. The company will be raising about N40 billion.
Guinness currently has total external loans of about N36 billions and also has about N40 billion in trade payables (as against N52 billion in current assets). Guinness is also said to owe its parent company, Diageo about $26 million in inter company loans.
Just last October, the parent company Diageo informed investors that it is no longer interested in taking up a further 15.7% of Guinness Nigeria Plc. The company had last year, made an offer to take up 15.7% of its Nigerian subsidiary in a move seen by many as a show of confidence in the outlook of its beleaguered subsidiary. The offer would have taken the parent company’s equity holding to about 70%.
Guinness posted a first quarter loss about N2.1 billion for the period ended September 30th 2016 following a full year loss of N2 billion for the period ended June 2016.
The company’s share price closed at N85 on Monday, up 9%. The stock has posted a year today return of -29% following weaker earnings.
This article was recently updated to reflect the offer target.