Guinness Nigeria is shifting its focus from premium brands to the “lower end” volume market in order to boost sales and revive profits, the brewer said in its rights issue share offer prospectus.
The Nigerian subsidiary of Diageo is looking to raise N39.7 billion ($109 million) to help reduce its now expensive dollar-denominated debt and to support volume growth strategy in the face of a biting economic recession.
Diageo, which owns 54 percent of the company, is supporting the cash call by converting into equity part of thedollar-denominated loan which it granted Guinness Nigeria at the peak of Nigeria’s currency crisis.
The company said shareholders can buy five new shares for every 11 held at N58 a share, representing 17 percent discount on Wednesday’s market price of N69.87.
“Given the economic recession in Nigeria … the company plans to deepen its participation in the value beer segment and increase beer product offerings in the lower end of the market,” Guinness Nigeria said in the share sale prospectus.