International Breweries is advancing plans to clear a significant heap of losses accumulated over recent years, which have resulted in negative retained earnings since 2019. The core of this strategy involves a share capital reduction, pending approval from shareholders at its upcoming annual general meeting.
The beer maker disclosed in a statement on Thursday that it proposes to reconstruct its share capital by eliminating negative retained earnings and returning excess capital. This transaction will be executed under Section 131 of the Companies and Allied Matters Act, 2020 (as amended), subject to regulatory approval and Federal High Court confirmation.
Following the announcement, shares in International Breweries surged by 10 per cent, reaching the maximum daily gain allowed by the Nigerian Exchange at market close.
Nigeria’s second-largest brewer reported its first profit in seven years last year, following the takeover by new majority shareholder AB InBev in 2016. However, the company faced significant difficulties between 2017 and 2025.
These challenges stemmed from the diluting impact of legacy negative net losses from entities that merged to form the larger International Breweries under the new ownership. Additionally, foreign exchange losses from a dollar squeeze during the Covid-19 pandemic and the far-reaching consequences of Nigeria’s currency reforms in the four years to 2024 exacerbated the company’s financial woes.
Accumulated losses, which reached N191 billion last year, have been a substantial barrier to dividend payments. To address this, the company plans to allocate part of the balance in its share premium account to clear these losses.
This strategic move is expected to restore distributable reserves and significantly improve the company’s prospects of declaring cash rewards for shareholders. Once the balance sheet is clear of negative retained earnings, International Breweries will consider further paring down the cash in the share premium account to facilitate a return of capital to shareholders.
The company stated that the amount payable per ordinary share will be distributed on a pro rata basis, determined with reference to the total amount approved by the Board of Directors for distribution from the share premium account.
