LAGOS, March 30 (Reuters) - Nigerian Breweries is giving shareholders the option of taking new shares in lieu of a cash dividend, so that it can use the money to cut interest costs and fund working capital, it said on Thursday.
Nigerian companies are going through a tough time brought on by low oil prices which tipped the economy into a recession, depleted the country’s foreign reserves, weakened the currency and caused chronic dollar shortages, frustrating businesses.
Several firms including rival brewer Guinness Nigeria , have reported record losses due to the weak economy, and earlier this year Guinness set a rights issue to raise 39.7 billion naira in fresh funds from its shareholders, including parent firm Diageo.
Owned 51.6 percent by Heineken, Nigerian Breweries said it had set a price of 130.59 naira for the new shares and shareholders rejecting the offer would be paid cash. Shareholders are due to approve the dividend of 2.58 naira a share at their annual meeting on May 3.
The share price closed at 130 naira on Thursday, up 0.77 percent, underperforming the broader index which rose 1.05 percent.
Nigeria’s IPO market has dried up for close to a decade following a crisis with regulators struggling to revive it. The Securities and Exchange Commission this month proposed cutting listing fees to attract issuers.
Last week top tier lender Zenith Bank shelved plans to raise 100 billion naira via a combination of bonds and share sales due to weak capital markets.
Nigeria’s main stock index is down 5.9 percent so far this year after losing 6.2 percent in 2016. In dollar terms, stocks lost 40 percent last year as the naira fell by a third on the official market against the dollar due to central bank reforms. (Reporting by Chijioke Ohuocha and Oludare Mayowa; Editing by Greg Mahlich)