Guinness Nigeria gets a lifeline of $95M from Diageo
The second largest brewer in Nigeria, Guinness Nigeria Plc, has received a lifeline of $95m loan from its parent company, Diageo, to cushion it from the current dollar shortages in the country caused by fall in oil prices.
Mr. Ronald Plumridge, Chief Marketing Officer of Guinness, explained that the company’s current foreign currency needs far outstrips what they are able to source locally and from its exports, hence the support from Diageo.
According to Plumridge, the loan was priced at three-month LIBOR plus 4.7%.
He said: “Longer term we intend to source raw materials locally”, adding that “the mix of the business, foreign exchange impact and inflation put pressure on the growth of the firm”.
Guinness Nigeria recently announced a pre-tax loss of N2.35b, the first in 30 years, as a result of declining sales, foreign currency shortages and domestic inflation at 11-year high of 17.6%.
He said due to the above constraints the firm would cut its total dividend to N0.30 for 2016 from the previous’ year of N3.20 as well as its staff strength by 310 in the last quarter of the year.
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