WATCH THE VIDEO HERE PZ Cussons Nigeria PLC has announced that its Board of Directors, after careful deliberation, has decided to convert $34.26 million of its outstanding loan into equity. In June 2022, PZ Cussons Holdings Limited (PZCH) loaned $40.26 million to PZ Cussons Nigeria PLC (PZCN) to help cover raw material and operational costs, which were difficult to manage due to currency shortages. However, between 2023 and 2024, the Naira experienced significant devaluation, which negatively impacted PZCN’s financial results and led to a rise in its foreign currency-denominated loans. In response to these challenges, the company’s board has decided to strengthen its balance sheet by settling the outstanding shareholder loan obligation and reducing exposure to foreign currency fluctuations. According to a disclosure signed by Alsec Nominees Limited, the company secretary, and published on the NGX on February 15, 2025, the Board stated: “After extensive discussions, we have agreed that converting a portion of the outstanding loan, amounting to USD 34.26 million, into equity is the most effective strategy to reduce debt and strengthen the Company’s balance sheet, while significantly minimizing the risk of future foreign exchange losses.” Post-Conversion, a remaining shareholder loan balance of $6 million will still be payable to PZCH. In June 2022, PZCH provided a loan of USD 40.26 million to its subsidiary, PZCN, to help the company meet its foreign currency obligations for raw materials and operational expenses. Despite these financial challenges, PZCN demonstrated revenue growth, achieving increases of 34% and 42% year-on-year for the full and half financial year periods ended 31 May 2024 and 30 November In response to these difficulties, the Board is actively exploring strategic options to improve the financial health of the company. The plan is to convert part of the outstanding shareholder loan of $34.26 million (N51,795,312,646.72) into equity at a price of N23.60 per share, effective February 12, 2025. Shareholder approval is required, along with clearance from the Securities and Exchange Commission (SEC) for the conversion and registration of new shares on the Nigerian Exchange Limited. The Board has approved these conversion terms after discussions with PZCH and recommends them for approval at an Extraordinary General Meeting on March 13, 2025, at Transcorp Hilton.
2024 respectively.
PZ Cussons Nigeria resolves to convert $34.2 million debt to equity, discloses remainder
