The management of Nigerian Breweries plc (NB Plc) has launched Commercial Paper (CP) Issuance Programme to raise additional N20 billion from its outstanding N100 billion leaving 80billion for future use.
The Nigerian Breweries company targets CP as Series 9 and 10 of the programme for continuation the utilization of its N100 billion Commercial Paper (CP) Issuance Programme in a bid to raise up to N20 billion to support its short term funding needs.
The company that is seriously in needs of N20million for support short term programmes paid N16.1billion as dividend last year and reduced profits for first three quarters of 2019.
This action led to several questions as why paying dividends and equally source for fund that involved interest at the end.
Analysis are of the opinion that Nigeria Breweries’ glory days are gone despite Heineken international investment in Nigerian Breweries over the years.
This information was disclosed in a notification signed by the Company’s Secretary, Uaboi G. Agbebaku, and sent to the Nigerian Stock Exchange.
The notification reads;
“[Nigerian Breweries Plc] is pleased to inform the Nigerian Stock Exchange and the investing public of the continuation of its “CP” (Commercial Paper) programme with the launch of Series 9 and 10 of the programme.
“Series 9 of the Commercial Paper programme would be for a tenor of 180 days, while Series 10 would be for 270 days. However, the launch of the CP opens today 23rd October 2020.”
According to data obtained from Financial Market Dealers Quote (FMDQ), Nigerian Breweries has raised up to N90.12 billion since the start of the year.
N52.76 billion was raised from Series 6 between February 12 to November 6, 2020.
N13.03 billion was raised from Series 7 from April 15 to October 14, 2020.
N24.33 billion was raised from Series 8 from April 15 to January 8, 2021.
The recent issuance of the Series 9 and 10 CP will bring the total funds raised to N110.12 billion.
A company with Shares Outstanding stood at 7,996.90 million and Market Capitalisation of 415,838.90 in Naira
Nigerian Breweries Plc post a positive Profit After Tax of N16 billion for the year 2019 and paid approved dividend of N16.1 billion for the year ended December 31, 2019
Company reasons for CP
The CP will help the company navigate through the recent impact of COVID-19 and other trade disruptions.
The programme will strengthen the balance sheet of the company, and enable the brewer to execute its plans while delivering value to customers and creating wealth for shareholders,
Furthermore, the CP programme is expected to provide opportunities for non-equity investors to invest in the company and support its cost management initiatives.