Aiming to secure the buy-in of shareholders and potential investors to its proposed rights issue, International Breweries Plc (IB Plc), a proud part of the AB Inbev Group, the world’s largest brewer, has organised investors’ fora in Lagos, Ibadan and Port Harcourt.
The sessions provided the shareholders with the opportunity to hear directly from the top management of International Breweries how the business is performing, and to seek clarifications on grey areas in the company’s operations. In attendance at the fora were the top management, including the Managing Director of IB Plc, Mrs Annabelle Degroot, the Chief Financial Officer, Mr Zuber Momoniat, the Legal and Corporate Affairs Director, Otunba Michael Daramola, among others. Also in attendance were representatives from Chapel Hill Denham, advisors to the rights issue, Mr Lanre Buluro and Mr Kingsley Aigbe.
In an elaborate presentation, Degroot intimated the shareholders on the company’s year-to-date financial performance, its marketing and sales drive, and its growth plans. The brewer, according to Degroot, has achieved revenue growth of 17% year-on-year and has achieved a growth in market share to become the number two brewery company in the country in terms of sales.
“Following significant investment in our Nigeria operations in the last few years to capitalise on the growth of our brands in this market, the rights issue presents an opportunity to strengthen our balance sheet. The capital raised will be utilized to reduce our debt and thereby lower the interest charges incurred, and it will also assist us in providing financial flexibility to continue to pursue our growth strategy,” Degroot said. The company assured that the capital raised from the rights issue will be deployed majorly to retire existing third-party debts and lower the interest charges borne by the business.
During the question and answer session, shareholders showed the most concern around areas such as: rising cost of sales and strategies in place to reduce that, raw material sourcing and percentage of local content used, opening up of new markets, particularly in the north of the country, the effects of the new excise regime on performance, plan around the ready-to-drink market, product acceptance, etc.
Degroot said that “marketing and sales budget increased because we continue the aggressive drive to promote our brands, including the newly introduced ones like our premium brand Budweiser, and increase our market share.” She, however, assured shareholders and other stakeholders of a bright future ahead for the business, because she is “excited by the prospects showed by Budweiser, Hero, Trophy and the other brands.”
International Breweries has applied to the Securities and Exchange Commission to raise N165 billion in a rights issue at N9 per share and is expected to get the nod of the commission and clearance and approval from other relevant government agencies, following the approval of the issue by shareholders on 15 October 2019. The issue is expected to be concluded by year-end.