International Breweries opens N164b rights issue - The Nation Newspaper

Taofik Salako

International Breweries has opened application list for its N164 billion right issue, in a major recapitalisation that will see the Belgian core investor investing some additional N123 billion in the Nigerian subsidiary.

International Breweries is raising N164.39 billion through a rights issue of 18.266 billion ordinary shares of 50 kobo each at N9 per share. The rights issue is pre-allotted on the basis of 17 new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at the close of business on November 6, 2019.

Application list will run till Tuesday December 24, 2019. The opening of application list followed final approval of the offer by the Securities and Exchange Commission (SEC). The Nigerian Stock Exchange (NSE) and shareholders of the company had earlier approved the rights issue.

The Nation had reported that Anheuser-Busch InBev (AB InBev), the majority core investor in International Breweries, may be investing more than N123 billion in the Nigerian business in a major capital injection expected to consolidate Anheuser-Busch InBev’s push for the greater share of the Nigerian and Sub Saharan African markets.

Anheuser-Busch InBev holds the majority equity stake of 75.1 per cent in International Breweries Plc. With the pre-allotment ratio, about 13.72 billion ordinary shares of 50 kobo each have been pre-allotted to AB Inbev.

Sources in the know had said AB InBev was in support of the rights issue and had committed to participating fully in the new capital raising exercise.

The N164.39 billion recapitalisation exercise, one of the largest indirect capital injections in the Nigerian capital market, came on the heels of 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.