August 21, 2017/Cordros Research

Guinness Nigeria Plc’s (GUINNESS) Rights Issue, opened on 24 July, 2017, will close on Wednesday, 30 August 2017. The Rights Issue is being undertaken to enable GUINNESS optimize its capital structure by repaying its various outstanding loan obligations, thereby reducing financing costs.

Details of the Rights:

Being Issued –                     684,494,631 Ordinary Shares of 50 kobo each

Rights Price –                      N58.00 per share

Gross Issue Proceeds –      N39,700,688,598

Provisional Allotment –       5 new Ordinary Shares for every 11 Ordinary Shares of 50 kobo each held as at the close of business on 15 March 2017

Worthy of Note:

 (1) The Rights is offered at 31.8% discount to the stock’s current market price of N85.00,

(2) Our most recent research report values the company’s stock at N80.02, the Rights inclusive, and

(3) The theoretical market price of the stock after the Rights is estimated at N76.14.

In all three cases above, upside potential on the Rights price ranges between 31.3% and 46.6%.

Shareholders who do not wish to take up their Rights should take a cue from the wide upside potential in trading their Rights to interested investors.