CHAMPION Breweries Plc has received shareholders’ approval to raise a N20 billion bond and issue 1,579,058,099 ordinary shares to meet regulatory requirements.
The approval followed the resolutions passed at the company’s extraordinary general meeting (EGM).
In a statement on Thursday, December 5, Champion Breweries said it would launch a N15 billion bond programme and an N5 billion series 1 bond issuance through a dedicated funding vehicle.
The fund is to be used to provide the financial foundation for the company’s long-term growth and operational stability.
The company also received shareholders’ approval to issue up to 1,579,058,099 ordinary shares to meet the Nigerian Exchange Limited’s (NGX) free float requirement.
The fund is expected to help the company improve its market liquidity, fund key infrastructure projects, expand production capacity, and enhance operational efficiency.
A key player in the Nigerian brewing industry, Champion Breweries reportedly has a 3.58 per cent free float as against the minimum of 20 per cent of the issued and fully paid-up shares for companies on the mainboard.
At the company’s Facts Behind the Figures presentation in October, the managing director, Inalegwu Adoga, hinted at plans to address its free-float deficiency on the Nigerian Exchange Limited (NGX) and issue new shares to the investing public.
Adoga, added, “Today marks a historic moment for Champion Breweries. With the approval of these resolutions, we are not only ensuring compliance with regulatory requirements but also setting the stage for an exciting future.
“These steps will allow us to enhance our operational capacity and unlock significant growth opportunities for our stakeholders.”
A free float, also known as a public float, refers to the shares of a company that can be publicly traded and are not restricted.
“These approvals represent a bold and necessary step for Champion Breweries as we position ourselves for the next phase of growth. With the backing of our shareholders, we are well-equipped to enhance our operational capacity, meet regulatory requirements, and deliver exceptional value to all our stakeholders.
“This marks the beginning of an exciting new chapter in our journey,” the company’s chairman, Imo-Abasi Jacob, said.
In June, The ICIR reported that a global beverage giant, Heineken International, sold off its 100 per cent stake in Champion Breweries.
In October, the company hinted at the plans to issue new shares to the investing public to address its free-float deficiency on the Nigerian stock market.
To remain listed on the Nigerian stock market, the company has to galvanise shareholder value by ensuring it meets the free float requirement.
The ICIR can report that Champion Breweries plunged into a financial loss in its half-year 2024 results.
It posted a loss after tax of N386.66 million, from a profit position of N29.03 million, mainly due to a foreign exchange revaluation loss of N910.73 million.
In 2023, Champion Breweries’ financial performance revealed a marginal decline across its profit lines, The ICIR reported.
It posted a revenue decline of N12.70 billion in 2023 from N12.29 billion in 2022 and a gross profit of N5.07 billion from N5.81 billion.
Its operating profit significantly dropped to N603.97 million from N2.27 billion, profit before tax to N445.34 million from N2.25 billion, and profit after tax to N370.56 million from N1.41 billion.