Champion Breweries opens share offer assisting African expansion
Nigeria’s Champion Breweries has opened its NGN42 billion (£22.9 million) public offer of ordinary shares and has taken the next steps in its expansion across Africa following the acquisition of alcoholic RTD brand Bullet.
The public offer marks a major step in its two-phase capital-raising strategy and has been priced at NGN16 (£0.01) per share. The move follows regulatory approvals from the Securities and Exchange Commission (SEC) and the Nigerian Exchange Limited (NGX).
Reports reveal that the offer comprises 2.625 billion ordinary shares of 50 kobo each and will run until 21 January with Access Bank named as the receiving bank.
‘First phase’
The public offer comes on the back of the company’s recent NGN15.9 billion rights issue to existing shareholders, which has been regarded as “the first phase” of the Nigerian brewing company’s capital mobilisation initiative. Champion Breweries has seen many successes in the past year. For instance, the company posted figures of NGN7 billion (US$4.6 million) in 2023 and then NGN21 billion (US$13.7 million) for 2024 and then also increased profit after tax by 121%.
Each of the funding rounds are set to strengthen the brewery’s balance sheet and have helped to fund the business’s recent acquisition of the Bullet brand portfolio through an asset carve-out structure that transfers ownership of Bullet’s brands, trademarks, recipes and commercial rights across its African markets.
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Bullet, which is known as Nigeria’s leading alcoholic RTD as well as one of the most dominant energy drink brands in its markets, has presence in 14 African countries.
Strategic shift
According to analysts, the transaction has represented a strategic shift for the company and will assist in its transformation from a domestic brewer into a diversified, pan-African drinks company.
Local reports have identified that “Bullet’s significant FX-denominated revenues are expected to provide Champion with a natural hedge against naira volatility while accelerating its regional expansion ambitions”.
Additionally, digging deeper, the proceeds from the public offer have been alleged to have been “deployed to support working capital needs and growth initiatives, including route-to-market expansion, marketing investments, innovation and capacity enhancement”.
Champion’s recent financial performance has reinforced investor interest in the offer, according to analysts which have already highlighted how revenue rose from NGN12.7 billion (£663,000) in 2023 to NGN20.9 billion ( £1 million) in 2024, while net profit more than doubled from NGN370 million (£193,000) to NGN817 million (£948,000).
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