Guinness Ghana Limited has launched a renounceable rights issue to raise GH¢180million to inject into its operations.
The issue will be conducted through 96,256,685 ordinary shares of no par value at GH¢ 1.87 per share in a ratio of 1 new share for every 2.1956 existing shares held by a Qualifying Shareholder (the “Transaction”).
The move also forms part of the company’s strategy to improve its financial performance.
Figures for the first nine months of the 2016 fiscal year for Guinness Ghana showed that it made a loss of 8 million cedis.
This was largely due to the high interest rates and increased utility tariffs which impacted heavily on the company’s expense for the period under review.
This also increased Guinness Ghana’s debts and reduced its profitability for the fiscal year.
The Managing Director of Guinness Ghana, Francis Agbonlahor who announced the launch stated that, proceeds from the issue will turn around the fortunes of the company in the rest of 2016 and beyond, “The renounceable rights are expected to return GGBL to an optimal capital structure, reduce the interest burden on GGBL, provide GGBL with the financial flexibility to invest in future value creating opportunities and return GGBL to a position where it can pay dividends,” he noted.
Meanwhile a statement on the launch indicated, “The renounceable rights that we have issued will help us reduce interest bearing on external and inter-company debts of GH¢ 26,400 and GH¢ 150,000 respectively. Also, GH¢ 180,000 will be used to service the issuance costs.”
Guinness Ghana added, “By reducing its debt, GGBL will reduce its interest charges and return to a positive net profit position and resume paying dividends in the medium term.”
The issue which commenced on May 6, 2016 will end on June 3, 2016.
Trading of shares on the Ghana Stock Exchange is also expected to commence on June 22, 2016.
Source: Citibusinessnews