Nigerian Breweries Plc has said it will seek shareholders’ approval for a loan of €110 million from its parent company, Heineken International, at its forthcoming annual general meeting (AGM).
This is as the company said it might face more difficult times if the Federal Government (FG) went ahead to increase excise duty on its products. The company says they are currently in talks with government.
According to the company’s Finance Director, Ben Wessels Boer, NB plans to deploy the facility to defray some foreign loans and outstanding debt to IBECOR and the buying agent.’
Boer said foreign exchange losses had a major impact on the company’s profitability in 2022, while adding that it would settle its long-overdue payables to IBECOR and Heineken International via a €110 million loan and would need shareholders’ approval for the loan.
“We expect that if it is approved, we can already get the loan in May 2023, and basically, we will use that, and indeed, it is enough to pay the overdues to our buying agent and all the full denominated debts.
“We also have some debt that is not foreign-denominated, which includes dividends to Heineken and also royalties. We are not using this debt to repay those, but it is for the foreign-denominated debt that we will pay and also for machinery because that part of course is critical for our business continuity”, Boer said.
Also, the Managing Director of the Brewer of Alcoholic and Non-Alcoholic Beverages, Hans Essaadi, said the company is still in dialogue with the Federal Government over the proposed increase in excise duty on its products.
He said the proposed increase in excise duty would have a devastating effect on its business as well as the performance of the brewery sector.
Essaadi said while the fundamentals of the Nigerian market are very positive with the benefit of an enabling environment, the nation’s macro-economic indicators, security, and infrastructure continue to remain at high risk.
