How ₦59bn Debt Load Reshapes Champion Breweries’ Operations

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Champion Breweries Plc took on ₦59.03 billion in new borrowings in 2025 to finance the ₦60.3 billion acquisition of the Bullet brand assets and other capital projects.

This borrowing sharply increased its debt profile and pushed its gearing ratio to 89 per cent, Pinnacle Daily analysis of the company’s audited 2025 financial statement released on Monday has shown.

The borrowing spree marked a major capital restructuring for the brewer, which used a mix of bonds, bank loans and commercial papers to fund the transaction and plant upgrades.

A review of the results shows that Champion Breweries’ largest chunk of the debt came from a ₦30 billion Series 1 Bond issued on December 23, 2025, under a ₦45 billion bond programme.

The five-year senior unsecured fixed-rate bond carries a 19.50 per cent interest rate and matures in 2030. After issuance costs, the company received ₦29.51 billion.

To boost short-term liquidity, the company also secured an ₦18.92 billion bridge loan facility from Rand Merchant Bank Nigeria Limited at a fixed interest rate of 23 per cent per annum.

The facility is structured as a bullet repayment, meaning the full amount is due at maturity, and is secured by a first-ranking charge over an Issue Proceeds Account.

Under its ₦15 billion Commercial Paper programme, Champion raised short-term funds in two series.

Series 1 raised ₦3.79 billion at a 23.50 per cent yield and was fully settled at maturity on December 30, 2025, and Series 2 raised ₦9.06 billion, with a face value of ₦10.78 billion, at an implied yield of 26 per cent.

This series is due for repayment on April 1, 2026, creating a key near-term obligation.

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In addition, a ₦263 million trade payable to Nigerian Breweries Plc was converted into a formal loan at a 30 per cent annual interest rate after the related-party relationship ended following EnjoyCorp’s acquisition of Champion from Heineken.

The heavy borrowing significantly altered the company’s balance sheet.

Total liabilities rose from ₦9.29 billion in 2024 to ₦69.26 billion in 2025, while total assets surged from ₦21.35 billion to ₦82.34 billion, largely driven by ₦47.3 billion in cash and cash equivalents and a ₦9.74 billion investment deposit linked to the Bullet acquisition.

Its net assets increased modestly from ₦12.06 billion to ₦13.08 billion.

As a result, the gearing ratio swung from negative 36 per cent in 2024 to 89 per cent in 2025, even as finance costs climbed from ₦1.07 billion to ₦2.62 billion during the year.

Strong earning record

Despite the higher leverage, the company recorded strong earnings growth as revenue rose 43 per cent to ₦29.80 billion from ₦20.89 billion.

Operating profit more than doubled to ₦4.83 billion, while profit before tax grew 108 per cent to ₦2.65 billion. Profit after tax increased 119 per cent to ₦1.79 billion, and earnings per share rose from 9.1 kobo to 20.0 kobo.

The board has recommended a dividend of 7 kobo per share, up from 6 kobo in 2024.

However, to ease pressure from short-term, high-interest debt, the company completed a rights issue and public offer in February 2026.

The proceeds were positioned to settle the remaining 90 per cent balance of the ₦60.3 billion Bullet acquisition and are expected to help reduce reliance on expensive facilities such as the 23 per cent bridge loan and 26 per cent commercial papers.

A further look at the results indicates that the April 1, 2026, maturity of the ₦10.78 billion Series 2 commercial paper remains a key short-term obligation, but the equity raise is intended to stabilise the company’s capital structure and rebalance its debt-to-equity position after an aggressive expansion year.

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