Diageo Plc’s Nigeria unit stated it’s struggling to refinance a foreign-currency mortgage and trim prices following a scarcity of dollars in Africa’s largest economic system.
Guinness Nigeria Plc is weighing choices to handle a $23 million debt as a scarcity of liquidity within the native foreign-exchange market has made it tough to refinance, Stanley Njoroge, finance and technique director, stated on an investor name in Lagos on Friday.
“We’ll need to refinance it however there isn’t a overseas forex available in the market in the mean time,” he stated.
The brewer of Guinness Stout is seeking to roll over the mortgage which matures in Might subsequent 12 months, however is but to determine whether or not to maintain it as a greenback debt or convert to a local-currency mortgage. Nigeria’s second largest brewer’s excellent debt rose 16% to 23.2 billion naira ($60 million) as of June in contrast with a 12 months in the past, whereas finance prices rose 74% to four.5 billion naira.
Nigerian firms are struggling to entry the dollar after a hunch in oil costs minimize export earnings, placing stress on the central financial institution’s capability to satisfy greenback obligations to buyers and companies. “International trade is a giant concern for us,” Njoroge stated.
Guinness Nigeria made a internet lack of 12.6 billion naira for the complete 12 months by June in contrast with a revenue of 5.5 billion naira a 12 months in the past, in response to its submitting on the Nigerian Stock Exchange on Friday. Income dropped by 21% to 104.four billion naira.
The corporate will prioritize stout, spirit and malt manufacturers in 2020 and focus much less on lager because it goals to develop the enterprise and cushion the affect of the Covid-19 pandemic on operations, Njoroge stated.
“We don’t have the precise value in lager,” he stated.
(Updates with firm’s precedence in 2020 in final paragraph)