E-Malt.com News article: Nigeria: International Breweries assures shareholders of commitment to creating long-term value

The board and management of International Breweries (IB) Plc have assured shareholders and other stakeholders that the company remains committed to creating long-term value for all stakeholders, The Nation Newspaper reported on February 24.

Directors of International Breweries at the weekend paid a courtesy visit to the Nigerian Stock Exchange (NSE) in commemoration of the conclusion and listing of the company’s N165 billion rights, reputed as the largest rights issue in Nigerian market.

International Breweries, a subsidiary of Anheuser-Busch InBev (AB InBev), had offered 18.27 billion ordinary shares of 50 kobo each to existing shareholders at N9 per share on the basis of 17 new ordinary shares of 50 kobo each for every eight ordinary shares held as at November 6, 2019. The rights issue was fully subscribed, injecting N165 billion into the company.

Finance Director, International Breweries Plc, Mr. Bruno Zambrano said the recapitalisation of the company through the rights issue has led to improvement in its operational and financial flexibility while significantly reducing financing cost.

He assured shareholders of the company’s commitment to creation of long-term value as rewards for their supports over the years.

According to him, the company will continue to explore every option to bring smiles to consumers and shareholders.

He pointed out that at the heart of International Breweries’ strategy is the building of a sustainable business for the long-term.

Non Executive Director, International Breweries Plc, Mrs Olutoyin Odulate who performed the ceremonial beating of the closing gong at the NSE, noted that with the success of the recapitalisation and ongoing efforts by the board and management, the company has emerged as a market leader to watch out for.

In his remarks, Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, praised the company for its growth drive and reiterated the commitment of the Exchange to working with quoted companies to deliver values to their stakeholders.

He said the NSE had been engaging the government on tax incentives for quoted companies such as International Breweries in order to support their growth and productivity.

He emphasised the need for the company to continuously engage the market through adequate briefing on its operations and financial performance.

AB InBev had invested in capacity expansion including about N90 billion or $250 million in its Sagamu plant while it also injected N124 billion or $341 million through the rights issue.

Unarguably the number two brewer in Nigeria, International Breweries now controls about 25 per cent of the Nigerian beer market through its hold of market share on the back of its two core brands.

Anheuser-Busch InBev holds the majority equity stake of 75.1 per cent in International Breweries. The N164.39 billion recapitalisation came after the consolidation of AB InBev’s Nigerian operations under a single corporate entity.

AB InBev had in 2017 merged its three indirect Nigerian subsidiaries-International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited. The merger was done through a scheme of merger with International Breweries subsisting as the post-merger company. The merger was seen as a major strategic move by Anheuser-Busch InBev to upend competition and consolidate its Nigerian base for further expansion into the Sub-Saharan Africa (SSA).

With the 2017 business combination, AB InBev’s majority equity stake in International Breweries increased to 75.1 per cent. A total of 5.302 billion ordinary shares were issued for the merger. With the supplementary listing of 5.302 billion ordinary shares, the total issued and fully paid up shares of International Breweries had increased from 3.294 billion to 8.596 billion ordinary shares.

The merger was believed to be a major competitive move by AB InBev to give its operations a major nationwide push to increase its market share. International Breweries is located in Ilesa, Osun State in the South West region. Intafact Beverages’ brewery is situated in Onitsha, Anambra State in the South-East region while Pabod Breweries is located in Oginigba, Port Harcourt, Rivers Sate in the South-South region.

Prior to the merger, AB InBev held 72.17 per cent majority equity stake in International Breweries through its subsidiary-Brauhaase International Management GMBH. SABMiller Nigeria Holdings BV-another subsidiary of AB InBev had held 75 per cent and 82.81 per cent majority equity stakes in Intafact and Pabod respectively. Ministry of Finance of Anambra State had held 10 per cent equity stake in Intafact while Ministry of Finance Incorporated of Rivers State held 14.52 per cent equity stake in Pabod.

After the merger of the three companies-SABMiller Nigeria Holdings BV and Brauhaase International Management GMBH hold 47.4 per cent and 27.7 per cent equity stake respectively in International Breweries, giving the foreign majority core investor controlling equity stake of 75.1 per cent. Ministry of Finance of Anambra State holds 4.7 per cent equity stake while other minority shareholders hold the remaining 20.2 per cent equity stake.


27 February, 2020