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PETER OBI’S EQUITIES INVESTMENT IN INTERNATIONAL BREWERIES PLC: SEPARATING THE TRUTH FROM FALSEHOOD
Japheth Jev
Japheth Jev
AI + Finance Researcher
Published Nov 16, 2022
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The media in Nigeria has been inundated with comments made by professor Charles Soludo, an economist and the governor of Anambra state over the investment that Peter Obi made in the equities/shares of International Breweries Plc. Prof Charles’ comment has generated mixed arguments as some Nigerians have pushed back against it, while others considered it a leverage to intensify their de-marketing effort against Mr Peter Obi.

This piece is set out to bring clarity about the nature of this investment and to prove the validity or otherwise of professor Soludo’s comment.

As an economist, a chartered ant, and a British trained finance expert, I feel compelled to address any form of disinformation created by politicians for the purpose of deliberately misleading Nigerian voters who have suffered under the yoke of gruesome bad governance in the country, especially when such disinformation relates to economy and investment. Because I believe that the good people of Nigeria should be given adequate information about ALL presidential candidates to enable them make the right decision about who will lead them as president.

ABOUT THE COMPANY- INTERNATIONAL BREWERIES PLC

International Breweries Plc is a public liability company that is listed on Nigeria Stock Exchange. This means that its shares are open to anyone who wishes to become a shareholder or part owner of the company to buy its shares and its hip. The company products are beers and non-alcohol such as Hero Larger, Castle, Grand malt, and Beta malt.

The major investors/shareholders in this company are AB InBev- the biggest brewing multinational company in the whole World. AB InBev holds 75% of the equities in this company.

INTERNATIONAL BREWERIES PLC FINANCIAL AND STOCK PERFORMANCE

This company has huge revenue generating capacity as it generated the sales revenue of N182.30b in the financial year 2021. Comparing this to its revenue of N136.79b in 2020, you can see that the company was able to grow its topline revenue by 33.82% over this period. This is certainly an impressive performance. This also indicates that the company has quality products that its customers are willing to pay for. However, the company made a net loss of N17.66b, meaning that the company lost money during this period.



This company has a total market capitalization of N107.45b at the time I was writing this report. Market capitalization means the value of the company at a period of time. So its value today is N107.45b but NOT N0.0 (ZERO Naira) as my colleague prof. Charles and other politicians against Peter have claimed.



The company’s equity price( means one unit of shares that represents ownership in the company) has fluctuated throughout this year moving from N5.49 per share to the highest amount of N8.80 per share, and then dropped down to a low price of N4.05 per share at the time of writing this report (See chart 1 below). This fluctuation is typical of equity investments whose value moves up and down throughout the period that an investor invests and holds it. And this is what represents the investment risk to investors who put their money in this type of assets. However, it is important to state that an investors who holds this type of investment losses their money only when they sell the stock during the period of price decline; they do not loss their money as long as they continue to hold their investment until the market price goes up again.

THE TRUE MARKET VALUE OF ANAMBRA STATE GOVERNMENT INVESTMENT IN INTERNATIONAL BREWERIES PLC

Peter Obi who was the then governor of Anambra state invested the sum of N1.95b (this was worth $9M at exchange rate prebailent, then) in 2012 for a 10% equity ownership in a Beverage company called Intafact Beverages Limited. This company had a brand new brewery in Onitsha. The major shareholder and owners of this company was SAB Miller Breweries, a multinational South African Brewing company. SAB Miller invested USD100M in Intafact Beverages Limited.

Some years later, SAB Miller sold their controlling stake in Intafact Beverages Limited to the global multinational Brewing company- AB InBev. There was a change in ownership of Intafact Beverages Limited and the new owners- AB InBev decided to re-organized ALL their brewing companies in Nigeria under a single company called International Breweries Plc, which was publicly listed on the Nigeria Stock Exchange. This new arrangement and re-organization resulted in a fresh valuation of the investment of Anambra state governments which was valued at the equivalent of 406,321,264 stocks/shares in International Breweries Plc, representing a 1.51% ownership in the company.

To know the true market value of Anambra State Government investment in this company, without sentiment and distortion of facts is simple. Simply take the value of the share price of International Breweries Plc for the day and times it by the number of shares that Anambra State has in the company. For example, the true value of this investment today is : 406,321,264 * N4.05 = N1,645,601,119 = N1.65b. This simple math shows that the true value of Anambra’s investment that Peter made is NOT ZERO as claimed by professor Charles.

I earlier stated that equity investment fluctuates, i.e. changes value by moving up and down. So in the above computation the value of this investment is down and total worth is less than the original capital of N1.95b that Peter invested in this company. If Anambra state decides to sell this investment today, they would lose N304M in this business. But they are not in any loss as long as they continue to hold the investment to the future; rather, they can potentially gain from it.

Finally, let us consider a situation where Anambra could make money from this investment. Looking at the Graph 1 above , you will find that the share price of International Breweries was N8.80 in May this year. At this price, the Total value of this investment was: 406,321,264 * N8.80 = N3,575,627,123 = N3.58b! So, at this point, Anambra investment was actually in a huge profit and could potentially generate a profit of $1.63B to the government and people of Anambra State, had they decided to sell this investment in the month of MAY 2022.

Based on the foregoing analysis, it is clear that professor Charles Soludo and other politicians in Nigeria who are claiming that the value of this investment is ZERO are wrong. It is apparent that they are simply trying to maliciously feed the good people of Nigeria with disinformation, which they think could sway the teaming masses against Peter Obi who is projected to win the presidential election next year.

Japheth Jev, MSc (UK), CIMA(UK), CGMA(US), ACA, writes from Birmingham UK



https://www.facebook.com/share/p/1Bn1HCUzUt/

Soludo’s problem has always been envy and jealousy.
Check his antecedents. He always feel threatened by people who are more intellectually sound and popular than him.

I'm from ANAMBRA state and I live in Onitsha.
I have two friends who are working with the malt brand and I can confirm that the pay is good , plus the company keep rising pay .

Hero alone has been feeding a lot of people, both the factory workers and the field workers .
Even entertainers are making money from the company on daily basis .
I am also a music Artist, I have performed twice on there brand shows .
Many musicians in the East has been earning from the brand .
Kolaboy
Jariq
Sparkle Tee ( Hostel Dot com . cruna )
Agureo Banks
DJs etc .

It's madness to compare the value of a manufacturing company on the masses to a government house 🏠 that adds no value.
Instead would take from the state purse to maintain

And to think that one is a Professor.
While the other is a Trader , is heartbreaking.

I will still vote for Soludo to continue, cuz we can't let APC or PDP enter our state , since labour ain't ready to take what they could take if they're serious about it .

APGA has not been a bad choice


But Soludo should know that there's no way our people will ever love him more than Obi .
We still love Ngige more than Soludo .

The only person we would choose him over is Obiano the drunkard

Charles Soludo has been a strong antagonist of Peter Obi from antiquity. So it is nothing unusual aside political propaganda.

Everybody from ANAMBRA state knows why Soludo is mad .
He was expected to succeed Obi , but for fairness and equity, Obi chused Obiano from ANAMBRA west , a side that has never produced a governor

I could see how you are struggling to make this write up.
I question all the finance qualifications you have listed, because you assumed that the money invested came at zero costs.
The value of $9million today is N13.5 billion, compare this to today's value of the shares left.
Sometimes it's best to keep quiet

In a country where politicians are stealing money left-right-centre and stashing the money in Switz s, some people are actually insulting Obi for investing government money in a Brewery that has created hundreds of jobs for Anambra people and is generating millions in revenue

No be juju be that?

Lifestone:
I could see how you are struggling to make this write up.
I question all the finance qualifications you have listed, because you assumed that the money invested came at zero costs.
The value of $9million today is N13.5 billion, compare this to today's value of the shares left.
Sometimes it's best to keep quiet

First I didn't make the write up , I don't own it .

Secondly the analysis shows my state could make huge profit should we decide to sale our share as at the time this arguments began .
I hope you read to the end before trying to play half smart .
And by the way , what are the economical value of a paradise state house .

NB: I hope you answer the last paragraph

gidgiddy:
In a country where politicians are stealing money left-right-centre and stashing the money in Switz s, some people are actually insulting Obi for investing government money in a Brewery that has created hundreds of jobs for Anambra people and is generating millions in revenue

No be juju be that?

A particular statistics shows that Nigeria has the lowest IQ among nations.

You could see it on Nairaland

RomanticOO7:


First I didn't make the write up , I don't own it .

Secondly the analysis shows my state could make huge profit should we decide to sale our share as at the time this arguments began .
I hope you read to the end before trying to play half smart .
And by the way , what are the economical value of a paradise state house .

NB: I hope you answer the last paragraph

I only responded to the half-education you are dishing out to people.
Soludo has people paid to explain his policies to Anambra people.
Hope you can see why I won't answer the last paragraph. It's not my call.

If every Nigerian state government strives to attract either a brewery or fruit juice company or soft drink company, Nigeria will end up revitalize with a booming agricultural industry that will farm fruits, a booming food processing businesses that will harvest, process and extract the juices for the bottling companies, packaging industries that will make the plastic, aluminum, paper packs , bottles, trucking companies, wholesale and retail companies that will seel the drinks to end s . These will create more than 10,000 jobs and raise the living standards of more than 500000 homes .

Only someone who doesn't think out of the box will not appreciate this. I wish the governor of Enugu state will tap into this because Enugu can get the fruits from kogi, Benue and nassarawa, process them in enugu with coal fired plants and solar powered factories, cargoe them to port Harcourt, Asaba, Benin, Aba, owerri,awka, uyo ,calabar Abuja, makurdi, lokoja,kaduna, kano and mafia and export the rest

Lifestone:

I only responded to the half-education you are dishing out to people.
Soludo has people paid to explain his policies to Anambra people.
Hope you can see why I won't answer the last paragraph. It's not my call.

You can't answer because you know the truth, but you people are on a campaign to finish opposition.

Anywhere obi did wrong I would say it how it is , but on this one Soludo sounds like he wasn't reasoning like the Economics he is .
Or maybe he has gone mad hating obi's popularity

Hero bear , which is actually what is been drank in the entire east and a large part of South South , star and the rest has lost the eastern market since it came onboard.
The company also produces Trophy lagers , Budweiser and Castle lite
They also has other brands like Beta malt, grand malt and flying fish .

And somebody who is a Professor of economics and his fellow let finish obi group is calling it useless.

Everything is not politics

k

my question now is has there been any inflow of cash dividends to the state of it's shares since 2012?

RomanticOO7:
Hero bear , which is actually what is been drank in the entire east and a large part of South South , star and the rest has lost the eastern market since it came onboard.
The company also produces Trophy lagers , Budweiser and Castle lite
They also has other brands like Beta malt, grand malt and flying fish .

And somebody who is a Professor of economics and his fellow let finish obi group is calling it useless.

Everything is not politics

They don't produce budweiser and flying fish.....this are imported beer like Heineken.

Bobodee09:


They don't produce budweiser and flying fish.....this are imported beer like Heineken.

International breweries owns those products, I don't want to start arguing

Because Obi has nothing else to show after being governor for 8 years that is why he always speaks of this investment in a brewery. The initial impression Obi tried to sell was that he built a brewery, from what we now know, he only bought shares of the company, which in itself is not a bad thing.

The problem is that he exaggerates this action of his more than it is really worth. Just so that no one thinks I am just hating on Obi even though I still consider him a lamba king, people need to know that Akwa Ibom also have investments in a brewery called Champions but because Akwa Ibom has many other infrastructural investment to point to, they do not even to mention it as one of their achievements,

If my sources are right, then Akwa Ibom also has some investments in Ibom Air, but you will not hear them brag about that either, so, with nothing really tangible for Obi to show, he now has to grasp at straws/

International Breweries own the franchise here in Nigeria @RomanticOO7

9jatriot:
Because Obi has nothing else to show after being governor for 8 years that is why he always speaks of this investment in a brewery. The initial impression Obi tried to sell was that he built a brewery, from what we now know, he only bought shares of the company, which in itself is not a bad thing.

The problem is that he exaggerates this action of his more than it is really worth. Just so that no one things I am just hating on Obi even though I still consider him a lamba king, people need to know that Akwa Ibom also have investments in a brewery called Champions but because Akwa Ibom has many other infrastructural investment to point to, they do not even to mention it as one of their achievements,

If my sources are right, then Akwa Ibom also has some investments in Ibom Air, but you will not hear them brag about that either, so, with nothing really tangible for Obi to show, he now has to grasp at straws/

Obi really is a failure at everything

What I think is that he does not really have the capacity for big things so small things for the camera that play to the gallery impresses him so much.

Who buys shares in an existing stock and calls the then president to come and commission it? Well, Obi invited GEJ for a commissioning

Bhella5:
Obi really is a failure at everything

RomanticOO7:


International breweries owns those products, I don't want to start arguing

You don't want to argue??

So Heineken is produced in Nigeria??

Nawa oooo

Bobodee09:


You don't want to argue??

So Heineken is produced in Nigeria??

Nawa oooo

As I said, I don't want to argue

Bobodee09:


You don't want to argue??

So Heineken is produced in Nigeria??

Nawa oooo

Don't sound like " prof " who went mad just to discredit a sensible investment with a prospective company.

Yorubaskullmine:
Soludo’s problem has always been envy and jealousy.
Check his antecedents. He always feel threatened by people who are more intellectually sound and popular than him.

So Obi is “more intellectually sound” than Soludo?

E be like that Hero beer don finally take all the space inside your body.

Shę na you be dis?