As part of its ongoing efforts to consolidate its acquisition and merger, Nigerian Breweries (NB) Plc has declared that it successfully raised N17.7 billion through commercial paper.
The new fund raised at an interest rate of 12.5 percent per annum was the fallout of the brewery giants N100 billion Commercial Paper (CP) programme established in 2013.
According to the company, the offer, which closed on October 8, following strong institutional investor participation, demonstrates confidence in the Nigerian Breweries story. The Nigerian Breweries CP programme is a significant addition to the Nigerian capital market.
“The success of the maiden issuance represents the strong acceptance of the issue in the market, which is further evidenced by the diverse category of investors to whom the securities were distributed,” Mark Rutten, Finance Director of NB said.
He stated that the transaction provides the company the ability to periodically access alternative debt funding at rates mirroring money market and treasury bill yields.
“This also serves to help bring down overall funding costs, which complement the company’s other sources of working capital whilst diversifying its funding sources to include non-bank investors. Our commercial paper issuances in the local markets will help to effectively manage and support the short term funding requirements of the company,” Rutten said.
The notes will be quoted on the FMDQ OTC platform to facilitate active secondary trading in the CPs, as it is a dedicated over-the-counter platform with an aim to promote liquidity of publicly issued securities.
The Managing Director of Nigerian Breweries, Mr. Nicolaas Vervelde, said the establishment of the N100 billion CP programme underscored continued commitment of the company to winning with Nigeria and represents the largest ever commercial paper programme to be established by a (non-financial institution) corporate issuer following the 2009 guidelines on commercial paper from the Central Bank of Nigeria.
Nigerian Breweries is engaged in the brewing, marketing and selling of both alcoholic and non-alcoholic beverage drinks.
Following the Company’s merger with Consolidated Breweries Plc in December 2014, Nigerian Breweries has a market share of around 70 per cent. It is a subsidiary of Heineken N.V., the largest brewer in Europe and the third largest brewer by volume in the world.
The company has an established track record of consistent and sustainable growth and has contributed significantly to the development of Nigeria and the economy.