Nige­rian unit plans rights is­sue

The Star Early Edition - - NEWS -

GUIN­NESS Nige­ria said yes­ter­day it was seek­ing share­holder ap­proval to raise 40 bil­lion naira (R1.7bn) with a rights is­sue of shares to strengthen its bal­ance sheet fol­low­ing re­cent losses. The com­pany, which is 54 per­cent owned by Di­a­geo, re­ported in Septem­ber last year it made a pre­tax loss of 2.35 bil­lion naira in the year ended June 30, its first an­nual loss in 30 years. Africa’s big­gest econ­omy is in re­ces­sion brought on by low oil prices, which have slashed gov­ern­ment rev­enues and crip­pled dol­lar sup­plies in the coun­try, frus­trat­ing busi­nesses. In Oc­to­ber last year the com­pany re­ported that it made a fur­ther pre­tax loss of 2.21 bil­lion naira in the quar­ter end­ing Septem­ber 30, com­pared with a profit of 517.6 mil­lion naira in the same pe­riod of 2015. Share­hold­ers will vote on the share sale to­day. Guin­ness Nige­ria shares, which have fallen 19 per­cent this month, rose 2.2 per­cent to 68.70 naira on the Lagos bourse yes­ter­day af­ter news of the rights is­sue. “Guin­ness Nige­ria be­lieves the rights is­sue will al­low the com­pany to op­ti­mise its bal­ance sheet im­prov­ing its fi­nan­cial and op­er­a­tional flex­i­bil­ity,” it told share­hold­ers. In Oc­to­ber, Di­a­geo scrapped plans to lift its stake in Guin­ness Nige­ria due to the tough con­di­tions in one of its big­gest mar­kets for the fa­mous stout. How­ever, it granted the Nige­rian unit a $95 mil­lion (R1.3bn) loan fa­cil­ity to help it cope with dol­lar short­ages. – Reuters

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