UACN Acquisition of CHI Limited Analyst and Investors Conference Call Transcript

UAC of Nigeria PLC: Acquisition of C.H.I Limited. Analyst and Investor Call Transcript Date: Monday, 17 November 2025 2:00PM WAT

Presenters:

• Mr. Fola Aiyesimoju (Group Managing Director)

• Mrs. Funke Ijaiya-Oladipo (Group Finance Director)

  Moderator

• Mrs. Cynthia Ojugo (Vice President)

1. Presentation Moderator: Good morning and good afternoon, ladies and gentlemen. Welcome to UAC of Nigeria PLC Analyst and Investor Conference Call. Please note that this call is being recorded.

   This conference call will be hosted by Fola Aiyesimoju, the Group Managing Director of UAC of Nigeria PLC and Funke Ijaiya-Oladipo, the Group Finance Director. Following prepared remarks by UAC's management team, there will be an interactive Q&A session. I will now hand the call over to Fola Aiyesimoju. Please go ahead.

   Fola Aiyesimoju (UAC Group Managing Director) Introductory remarks

   Thank you, Cynthia. Good day and thank you for making time to participate in this call, which is focused on providing insight on our recent acquisition of CHI Limited.

   I would like to start with an apology. We should have done this much sooner.

   Funke and I will adopt a slightly different approach to the format used on our earnings calls and spend a bit more time going through prepared materials. We would aim to leave sufficient time at the end to take questions.

   Over the course of today's presentation, we will cover the strategic rationale for the acquisition, provide an overview of CHI Limited, share transaction highlights and conclude with a post-acquisition outlook.

   If we had to summarise the entire discussion in one slide, it is to say that we acquired a wonderful business at a fair price and one that fits perfectly with our strategy.

   In shedding light on the CHI acquisition, we start with answering the questions why CHI and why now?, and there are four separate components to address: our preparedness, the rarity of the opportunity, timing, and fit.

   We start with preparedness. We felt we were ready to pursue and execute a transformational acquisition and set this out as a corporate priority. By far the greatest source of strength and confidence to embark on an initiative such as this is the depth and quality of the management team at UAC, which balances capabilities in commercial and operations with finance,

   governance, risk management, controls and technology. The idea of the acquisition would not have been possible without this team.

   Following management, and in no particular order of priority, are the investments we have made in technology which provide a platform to run businesses at scale.

   We have strong foundational technology with SAP S/4HANA as a core ERP system and cloud-based Microsoft applications. We also have a dedicated technology hub that develops bespoke solutions to support our business needs. We have devoted time to establish a set of management practices applicable to the manufacturing, marketing and distribution of branded consumer goods. These practices further bolster our ability to manage at scale.

   Crucially, we have strong risk management capabilities. We view risk management as foundational and without which scale becomes dangerous. Our efforts are overseen by a strong, experienced, dedicated and independent Board of Directors. Our Board holds us accountable and yet provides us the space to take measured risk. Our approach to managing brands and value creation is anchored on consistent product quality and availability, which is supported by sleek operations. These are the foundations on which all else is built. This approach has delivered solid results with our operating earnings growing 44% annually in naira and 9% annually in dollars, over the most difficult operating conditions in Nigeria's recent history. It is important to note that these numbers do not include the CHI acquisition on a pro forma basis. UAC's operating performance is increasingly reflected in our share price, which has outperformed the All-Share Index and the Consumer Index.

   The second key element of the why CHI? Why now? questions relate to the rarity of the opportunity. CHI has over 45 years of heritage and only one prior ownership change. As such, it was for us "now or who knows when".

   Next comes timing. We feel our investment was made at a good point in the cycle and this slide shows long term Enterprise Value to EBITDA multiples, a proxy for valuations, which are currently below long-term averages. We also believe we are positioned to benefit from recent reforms implemented by the government, which are too many to individually spend time on. Highlights include foreign exchange market reforms, monetary policy orthodoxy which are delivering results, energy reform which has huge potential for Nigeria, and importantly, the removal of fuel subsidy, creating much-needed fiscal space for investment in infrastructure. These reforms are causing a shift in business sentiment from the relative gloom of a few years ago to increasing optimism and perhaps, as importantly, beginning to reflect in key economic indicators. Some of you may have seen that the inflation numbers released today show a further decline to 16% from a peak of about 34%. Real GDP growth is rising, which should boost overall consumer spending. Foreign exchange reserves are also increasing, which should provide long-term support for the currency. Inflation is moderating, as I mentioned, reducing the strain on consumer wallets.

   Finally, comes fit. UAC is a House of scalable quality brands and CHI bolsters this position. Importantly, it is in the Food and Beverage sector, an area we know very well.

   In the next section, we provide an overview of CHI, which, over 45 years, has grown to become a leading Food and Beverage company in Nigeria. The business started operations producing the Caprisun brand under license in the early 80s. In the late 90s, it launched its own juice brand, the much-loved Chivita, and in the mid-2000s, launched Hollandia, the value-added dairy brand. The success of the business led to its acquisition by the Coca-Cola Company via a two-phased transaction between 2016 and 2019. CHI has grown to own a wonderful set of brands and an excellent set of products. It is a well-invested business and is the largest aseptic carton packaging manufacturing facility in Sub-Saharan Africa. It has very strong quality assurance processes, supply chain and process flexibility, which allows for the production of more than 50 SKUs. It also has efficient procurement systems to deliver value to the

   consumer. CHI benefits from truly outstanding nationwide distribution. The business is run by a highly capable and experienced team, which boosts the overall quality and strength of UAC's management. CHI's excellent brands and products are number one or close number two in each of its target segments. Importantly, it has more than 30% market share in each of these segments. The unique segments the business operates in are the Juices, Nectars and Still Drinks market or JNSD, where CHI is the close number two player with 38% market share and the products are sold under the Chivita brand and the Caprisun brand under license. The business also plays in the evaporated milk space, where it is the number two player with 33% market share and under the value-added dairy segment, we also have a drinking yoghurt offering in which we are the number one player with 43% market share. The evaporated milk and yoghurt products are sold under the Hollandia brand. Finally, CHI has two brands in the snacks space, Superbite and Beefie, where the business, with these two combined brands, is number two with just about 30% market share. In the 2024 financial year, which is the most recent set of audited results, CHI recorded revenues of N428 billion and EBITDA of N54 billion. The business has approximately 1,600 employees, supported by 3,500 outsourced personnel.

   In the next section, we go over highlights from the transaction. Given the relative scale and importance to us, we ensured we obtained robust advice covering legal, accounting, tax, human resources, IT, insurance, environmental, and technical to support our diligence. We obtained advice on financing optimal debt structures, legal advice from international council across two jurisdictions and domestic council on our bid documents and also putting in place the financing agreement for the bridge and the long-term take-out. We secured insurance for our warranty and indemnity package, and obtained robust tax advice. We are grateful to our advisors for the hard work and dedication they put in and would like to specifically call out Standard Bank, Stanbic IBTC, Fasken, and Templars, who went above and beyond over the course of the transaction.

   Total consideration paid to the seller was N182 billion, for which we acquired a business with no long-term debt. N22 billion in cash and N54 billion in EBITDA as I have mentioned. The business has N118 billion in working capital financing, but this is backed by N151 billion in net working capital. We incurred just about N9 billion in transaction expenses, some of which are going to be incurred as we complete our refinance. We hedged our payment which was denominated in dollars and given the naira's appreciation, that has cost us N7 billion. I will now hand over to Funke to take us through deal structure and financing.

   Funke Ijaiya-Oladipo (UAC Group Finance Director) Deal Structure and Financing

   Thank you, Fola. Good afternoon, ladies and gentlemen. I will walk you through the deal structure and how we financed the acquisition of CHI Limited. First, I will explain the structure, then how the acquisition was funded and conclude with what we aim to achieve going forward.

   To execute the transaction efficiently and ring-fence obligations, we set up a newly incorporated 100% owned Special Purpose Vehicle called UAC Food and Beverage Company Limited, which served as the acquisition and financing company.

   The transaction involved the transfer of 100% of CHI's shares to UAC for a cash consideration of N182 billion paid to the sellers. To fund this, we used a mix of equity and debt. N31 billion or 17% of this was funded from UAC's cash and N152 billion or 83% was funded through debt. The debt was primarily executed through a U.S. dollar bridge facility, which ensured the sellers received their proceeds in U.S. dollars and enabled timely completion of the acquisition. The bridge facility has a 12-month tenor and is priced at SOFR plus 5.5%.

   In parallel, we executed a foreign exchange risk management program, including a forward contract to hedge our exposure to currency volatility.

   Prior to concluding the acquisition, we secured a fully underwritten refinancing package in Naira, giving us certainty of long-term Naira funding once the bridge facility matures. We expect to complete the refinancing of the Dollar Bridge facility over the next three months. Our objective is to transition into longer tenor naira debt and we aim to do so using a mix of two sources. The first is a term loan from banks, and the second is a proposed bond issuance.

   It is important to highlight that the term loan has been deliberately structured with a sculpted amortisation profile with principal payments deferred, which will support integration and cash flow stability. In preparation for the bond, UAC has registered a N150 billion bond programme with the Securities and Exchange Commission. The programme provides us with flexibility and enables us to approach the capital markets for long-term funding when pricing conditions are supportive. With interest rates now easing and trending lower, we expect to benefit from more favourable pricing at the time of issuance. To also support the bond issuance, UAC maintains an investment-grade credit profile with an A rating from Data Pro and an A- rating from Agusto & Co.

   To summarize, the acquisition was executed through a newly incorporated SPV. It was funded with a mix of equity and dollar debt. Now that the deal has closed, our focus is on transitioning into longer term Naira financing. I will now hand the call back to Fola to continue with the rest of the presentation.

   Fola Aiyesimoju (UAC Group Managing Director)

   Thank you, Funke. The acquisition of CHI has further bolstered our house of scalable quality brands. We have gained exposure to large attractive growth markets in which we have strong market positions. We view CHI as a well-run business and a few weeks or just about a month into our ownership, our belief has been affirmed, and we have identified a clear set of value creation drivers in areas that UAC has a successful track record. We see two major risks inherent with the transaction and both relate to the meaningful import component or imported component of CHI's raw materials. The first relates to exposure to foreign exchange volatility or fluctuations and the need to source foreign exchange to fund operations. We have experience managing this, and we will focus on it over the long run and gradually shift to some domestic procurement and continue to be very careful with treasury risk management and very disciplined with pricing. It is also important to note that we have no disadvantage relative to any other players in the market. We also note that reliance on imported raw materials leads companies to hold longer term inventory than would have been required if the supply base was largely domestic. In 2024, CHI closed with 229 days of inventory. We will leverage our experience from our similar business, who makes Paints, and has very similar sourcing characteristics to CHI and optimise this. By way of contrast, our Paints business had approximately 90 days of inventory in the third quarter of this year. So, we see meaningful room to bring down the inventory holding days.

   Following the acquisition, our Packaged Food and Beverages and Paints businesses will contribute 85% to revenue and 93% to operating profit. The acquisition of CHI meaningfully increases our scale. While long term debt increases from our net cash position prior to the acquisition, our revenue increased more than threefold from N220 billion approximately to over N700 billion and our EBITDA from N25 billion to just shy of N70 billion.

   Our value creation focus will be largely around two things, the first being margin improvement and this is an area in which we have a very good track record.

   Our business, UAC Foods, which is very similar to CHI is reflected on the top of the page. UAC Foods, as many of you know, like CHI, plays in the snack segment, specifically long life-sausage rolls, where it is the number one player and CHI is the number two player.

   It also plays in the beverages space with our Swan water business and has an ice cream business that has meaningful dairy components.

   Since 2022, UAC Foods has grown at a compounded annual growth rate of 63% and in parallel increased its operating margins from 1% to 15%. CHI has similarly demonstrated very strong growth from a larger base, going from N171 billion revenue business to more than N500 billion. Margins have, however, suffered, and addressing this margin disparity is our number one value creation focus.

   Next, we will be reducing long term debt, which is currently at 2.4 times EBITDA post-acquisition. We would aim to bring this down to around 1.5 times. It is important to note that in sizing the debt we did not start from a target leverage number but rather worked with our advisers to work out what the optimal debt leverage or the company's debt capacity, and the number was a fixed naira number which translates to 2.4 times EBITDA, but we have historically operated with net cash and would seek to be a bit more prudent and bring this down to around 1.5 times.

   We would also closely monitor working capital debt, and we weigh this against working capital balances and make sure that we have meaningful cover in terms of net working capital balances relative to working capital debt and you see that, on the lower half of this page, we are in a good position here. I should stress that as we optimize overall levels of working capital, you will see this position begin to reduce as well.

   The next big element we would focus on is deleveraging and this is going to benefit from our free cash flow generation, which would be driven by margin improvement and working capital optimization. We will also shift our focus to divesting non-core assets. It is an area in which we have had recent success. I think we have generated over $30 million in divestment of non-core assets over the last few years and it is an area that we are going to apply a lot more focus to going forward and following this acquisition. The group generates N67 billion EBITDA before accounting for potential margin improvements, and this is well in excess of our debt service cost of N56 billion. As Funke mentioned, we are fortunate to be in a declining interest rate environment which we will benefit from by way of lower financing costs.

   The acquisition of CHI fits firmly with our growth strategy and following the acquisition, we will focus on executing our value creation plan, remain ambitious and focus on delivering stakeholder value and see continued opportunities for growth in our businesses. Thank you and we will now take questions.

2. Questions and Answers

Your first question is from Oluwatomi. Kindly unmute yourself and go ahead.

Oluwatomi Ogunwomoju (United Capital)

Since UACN is listed on the exchange as a different entity, is CHI also expected to be introduced as a separate entity, or will the shares be added to the UACN group as a whole? Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you, Oluwatomi. No, CHI is not going to be listed. It is a 100% privately owned subsidiary of UAC. So, it will be consolidated in UACN's numbers fully, but it is not going to be listed separately.

Timehin Sesby-Banjoh (WSTC Financial Services)

My question will be around Debt to EBITDA that was mentioned earlier. Is the goal to maintain

1.5x EBITDA as the debt coverage or what is the plan? How long does UACN look at winding down to their optimal working capital position? Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you, Timehin. I think it is important to note, and I mentioned this during the course of the discussion. We did not choose the 2.4x that we are today. We worked very closely with the banks to work out the combined group's debt capacity and size the debt appropriately. We just feel for prudence and to make sure we have headroom, we want to bring that down to around 1.5x. So, I am not sure that I would say that 1.5x is some scientific optimal level, but that is what we will aim to do in the near term. On a much longer-term, it is a very cash-generative group and business. So, I expect that those numbers will come down, but I do not know the degree with which it will come down below our short-term 1.5x level as the business generates cash.

Thank you for the detailed presentation. I have three questions. The first is around the margin improvement in the CHI business. Given the time you have taken in looking at the business and analysing the business, in your opinion, what are the sources of this margin improvement? Are you looking at SKU rationalisation, the naked margins of each of those SKUs? Can you give us a sense of where you think the normalised margin for this business will be and how quickly we can get there?

The second question is around the financing option. You have mentioned a term loan and bond. What are the prospects of equity financing? To complement that, I know the current market price does not reflect the value of the acquisition just yet, but at some point, given the balance sheet leverage is now on the higher end of what you would typically find in markets of this nature, is there some conversation that is being had internally or something that you would entertain?

My final question is on asset disposal. Are there assets that have been identified? It looks like the green business in terms of the mix of assets that you now have, appears to be an anomaly in terms of the contributory margin as well as the working capital needs of that business. What does a disposal of assets like that look like, and are those conversations that you guys are considering? Those are my questions. Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you, Samson. I think your first question was around margin improvement, normalised target levels, approach and timing. I think we feel from target levels, minimum 15%. We have a close to identical smaller business that is at 15%, so we see no reason why as a starting point, this business should not be there. So that is the first and easier one.

On timing, we are working very aggressively on this and we are going to set ourselves a goal of at least closing the fourth quarter of next year at these levels. Whether the full year will be at these levels, I do not know, but by the fourth quarter of next year, we want to be hitting

these levels. We are working on it at a rapid pace. It is by far the biggest priority for the team today.

In terms of the sources, what we found is that there are always multiple sources and the naked margins are obviously a big lever, and you are right, it is the area that we start to focus on a lot. When you dive into SKU by SKU reviews, we generally find opportunities to improve our margins and we found some here and are already implementing, but clearly, we will also look to find some efficiencies below the raw and packaging material line to improve our margin.

On Term loan and Bond, you are right, It is going to be a focus. Equity, we have no plans to raise. Given that we believe that the business would easily sustain these levels of debt and pay them down. You may recall that one of the questions we took, historically, was "why keep so much cash on your balance sheet?" We do not want to find ourselves right back where we were. Let us call it 12 to 18 months from now. We feel we can easily manage this level of debt. A lot of work went into deciding on what level of debt we should use for this acquisition, and we feel that the company's cash generation would pay this down over time.

In terms of asset disposals, yes, we have identified assets to dispose. Given various sensitivities and discussions around, I unfortunately cannot go into great detail on those now, but I will say, for example, that we have quite large minority positions in companies that are not core to us. Over time, we will look to realise value and then a few of the discussions that are going on in the Group, but it is going to be an area where we devote a meaningful amount of management time and attention to realising optimal value for our stakeholders. There's going to be no rush to do so. We are going to try and do so in a manner that realises value for our stakeholders.

Emeka Eke (Standard Chartered Bank)

Once again, congratulations on this milestone acquisition. I have two questions. One, about the SPV that was used to do the acquisition. I would just like to clarify where the acquisition debt is going to sit, is it on the SPV or on CHI Limited? The streaming of cash flows for servicing the debt, perhaps you need to shed more light on that. My second question is on FX risk, which you rightly pointed out. Based on the existing entities in the Group, you have your FX policy as it were. Now with CHI coming into the picture with a dramatically different FX content, maybe you want to shed more light, are you going to retain your existing FX policy or is it going to be something a bit different for CHI Limited? Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

We used an acquisition SPV, but the idea is to have debt sit as close to the operating cash as possible. We would explore moving debt down to sit on the balance sheet of the business. CHI is bigger but very similar to our Paints business. They have almost identical FX sourcing needs in terms of proportion of imported materials to domestic materials. What we try to do with those businesses is avoid open positions, we avoid having mismatches, and we would adopt the same approach that we have used very well with CAP PLC in managing this business.

Fola Aiyesimoju (UAC Group Managing Director)

No, we are not considering an equity raise. We have cash flows in excess of our debt service. We have very clear avenues to bring down what we think is an okay level of debt to a prudent and a low level of debt. We do not want to find ourselves sitting down with excess cash on our balance sheet unless there is a tangible opportunity for us to deploy that cash. The disposal

of non-core assets is going to be a management focus. We are focused on it immediately. The timing depends on factors that are beyond our control, but we are going to seek to balance a focus to realize assets with maximising value or at least obtaining fair value for shareholders. I think I should add that realizing value from non-core assets, deleveraging is a tangential benefit. The primary driver for this decision is to free up management time to focus on businesses that are bringing in the bulk of our revenues. I think it is very important to stress that the primary driver is more freeing up our time from having to provide governance, oversight, craft strategies, recruit management for businesses that are increasingly tangential and deploy those efforts on time to the businesses that are bringing the bulk of the value to the Group.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you. As specifically as regards capital gains tax, none. There is nothing obvious I can see that affects us, but anyone who has read the New Tax Act knows that it has extensive provisions around manufacturing companies, many of which benefit us. We are studying and by virtue of being a manufacturing company itself, CHI would also benefit, but I cannot think of anything specific around capital gains tax that affects this business from the New Tax Act.

Are we looking for additional acquisitions? It is not a priority for us, but we remain ambitious. We are clear in our focus areas. We are clear on what we find interesting. We have just made what is, at least for us, a very large acquisition. So, our laser focus is going to be on delivering our value creation thesis from this acquisition. As I clarify, by far the bigger driver of exiting non-core things is to free up the time to deliver on this value creation strategy for our core businesses.

Samson Esemuede (Zrosk Investment Management)

Can you talk to capital release on the working capital side? I saw in your slide that CHI currently has a very high level of inventory of 229 days as opposed to your Paints business that has about 90 days and you say both businesses are kind of similar in terms of characteristics, and also perhaps talk to what the working capital relationship in your existing Food businesses, what normalized working capital for these businesses are, and what is the expected size of capital release that we can see once you are able to normalize the working capital cycle?

Fola Aiyesimoju (UAC Group Managing Director)

We have started having those discussions internally because we now own the business, and we are firmly in management. We believe in evolution not revolution. We have seen that the working capital levels are higher than optimal, but we would never attempt to bring them to perfection with one fell swoop because you can cause meaningful disruptions. So, the cash conversion cycle for the business, which is what is more relevant in this context, I believe, is currently about 140 to 150 days. We will look, in the near term, to bring that to between 100 and 120 days, and then eventually bring that down much lower. It is a N500 billion business, so I am trying to do the rough math. Every 30 days, let's call that 10%, would be about N40 billion, if my math does not fail me, in terms of cash generation.

Thank you very much for this update call. I have three questions. The first, I know you touched on it a little bit, but is it possible just to expound a little more on what has driven the margin decline over the last four years? What specifically will UACN be doing over the next one year to get that margin back up to 15%. It seems like a fairly short period to get back to the 15% that CHI had reported back in 2022 from your disclosed financials. My second question is on CHI's current capacity utilization. Based on what you have seen, do you think there will be a need to invest in the capacity? If so, have you incorporated that into your existing financing arrangements? My last question is on the potential impact of MDS and CHI, insourcing and outsourcing logistics arrangements, is there any impact that this would have on CHI given the scale of its business, i.e. positive or negative? If so, what do you think that impact would be? Thanks.

Fola Aiyesimoju (UAC Group Managing Director)

For the margin, I can only give my hypothesis for why the margins declined over the last few years. What we believe and what we have seen with other companies is that, where there is rapid inflation (like it occurred in Nigeria and I would argue, unusually, that the kind of spike in inflation that we saw in the last few years, where it peaked at 34%, is unusual), it takes a laser focus on pricing and management practices that incorporate rigorous review of pricing at an SKU level to avoid margin declines. I am not sure what the circumstances were. I do not know why that was not the case here, but we have seen it broadly in FMCG in Nigeria. Some companies were able to take a laser focus and increase price while others were not, and you saw that margin declined. We have been here now for about 6 weeks. There is nothing I have seen that reduces my confidence about the ability to certainly improve margins. All I can say is that we have a target we set for ourselves, to get to 15% by the fourth quarter of 2026. I believe we will get there. If we fall short, it's not going to be 8% or 9%; maybe we get to 12% or 13% or maybe we exceed. It is just a failure to take a laser focus on pricing, in what was a highly inflationary environment, I will say, is the biggest driver, and then there will be 1% or 2% that we can squeeze out and from an efficiency perspective.

In terms of Capex and deciding the company's debt capacity, we took advice and there was a very detailed debt capacity model built including Capex. The business does not need meaningful capacity. It is very well invested. But you think about replacement Capex, you think about innovation, you think about replacing distribution tools, all that is built in, but there is no real need. We will have to be extremely successful for there to be a need for massive Capex investment. It would be a real upside case for us to get there.

In terms of MDS, the way MDS operates with our existing companies and will operate with CHI, is on a totally arm's length basis. It will pitch its services. If the team at CHI sees value, they may work together. If they do not see value, they do not work together. There is no going in expectation that MDS and CHI are going to work together on logistic services. I hope they can find a way to do so, but it is nowhere part of any of our plans and it is not mandated.

Just a follow-up question specifically on the pricing evolution. Looking at UAC Foods, you have managed to actually increase your margin significantly over the last two years just on the pricing side. Is it possible to comment on what some of the other CHI competitors have done specifically on pricing over the same period?

Fola Aiyesimoju (UAC Group Managing Director)

CHI has multiple competitors; unfortunately, most are private. In Juice, it was competing against its former sister company, which is Coca-Cola. I do not know what they did with pricing,

if I am honest. Against us, in the space we know best, we saw some players take pricing and they have done very well in our joint snacks space. I would also say that we have seen CHI belatedly take pricing in that space and do very well. In the evaporated milk segment, FrieslandCampina is the biggest competitor there. They initially were slow to take pricing, but I think they have released their results for the first two quarters of this year, and they have recorded meaningful increases in margin. I think most people, eventually, will get there. It is the speed and anticipation that vary by player.

Just one last question from me. Is it possible to also give us just a brief comment on volume changes over the period that you have reviewed on your slides as well?

Fola Aiyesimoju (UAC Group Managing Director)

What the business has done very well is grow volumes. That is what it has done very well, volumes have increased. We think that there may have been an overweighting of continuing to push volume increases versus balancing volume increases with margin like we have done, but it has grown its volume meaningfully about this time period.

Fola Aiyesimoju (UAC Group Managing Director) Funke, do you want to tackle that?

Funke Ijaiya-Oladipo (UAC Group Finance Director)

Thanks, Brad, for the question. The bridge loan is a USD facility, and we have entered a forward contract on that to protect against any volatility in the currency. It is a dollar bridge facility. It is 100% hedged.

Fola Aiyesimoju (UAC Group Managing Director)

Firstly, Desmond, none of the company's brand is CHI. The company has four brands, Chivita, Hollandia, Superbite and Beefie, and there is no intention of changing any of those brands. The corporate name is CHI Limited. Also, there is no intention to change the corporate name, but just to be clear that none of the brands is CHI. They are all different brands.

Fola Aiyesimoju (UAC Group Managing Director)

Yes, full refinancing into Naira. I think the expected interest rates are somewhere between 18% and 19% on a blended basis.