PZ Cussons Nigeria Plc has introduced that the corporate’s minority shareholders have voted to not approve the conversion of $34,264,544 (equal to N51,795,312,646.72) of the excellent intercompany mortgage quantity owed by the Firm to PZ Cussons (Holdings) Restricted into fairness.
The choice was made at PZCN’s Extraordinary Common Assembly (EGM) held on March thirteenth 2025 in Abuja.
Whereas there was robust minority shareholder help for the transaction, a major minority shareholder bloc voted towards the transaction and the approval threshold was not met.
The debt conversion was proposed to resolve challenges stemming from Nigeria’s forex devaluation and historic foreign exchange liquidity challenges.
In June 2022, PZCH superior an intercompany mortgage of $40.26 million to assist PZCN settle international forex payables for uncooked supplies and operational prices as a result of ongoing foreign exchange shortage.
Following the liberalisation of the international trade market in June 2023 and subsequent Naira devaluation, the international trade debt place drove an trade lack of N157.9 billion, leading to a N76.0 billion loss after tax and a adverse shareholders’ fairness place of N27.5 billion for the monetary yr ended 31 Might 2024.
Regardless of robust operational efficiency — with 34 per cent and 42 per cent year-on-year income progress for the intervals ended 31 Might 2024 and 30 November 2024 respectively, continued Naira depreciation has additional eroded operational income, worsening the adverse internet fairness place to N34.5 billion as of 30 November 2024.
Commenting on the end result of the EGM, the Chief Govt Officer (CEO) of the corporate Dimitris Kostianis mentioned:
“We wish to thank our shareholders for collaborating within the EGM and for his or her lively engagement within the course of. As a response to shareholder suggestions obtained throughout the assembly, the bulk shareholder amended the proposed conversion phrases to scale back the extent of debt to be transformed and enhance the conversion worth, which might have lowered minority shareholder dilution and likewise ensured that the corporate remained compliant with the 20 per cent free float requirement.
There was very robust minority shareholder help for the transaction, with 663 of the 675 minority shareholders current on the assembly voting in favour.
Nonetheless, the 75 per cent shareholding vote required to approve the decision was not met, as 12 minority shareholders representing a major shareholding voted towards the decision. In compliance with the legislation, the bulk shareholder didn’t vote on the decision.
We imagine that there have been robust advantages for the corporate and shareholders from the proposed transaction. By changing the intercompany mortgage into fairness, the corporate’s publicity to international trade volatility would have been considerably lowered, our stability sheet would have been strengthened, and future money circulate would have been freed as much as be allotted to productive investments that help the corporate’s worthwhile and sustainable progress ambitions. This could have established the idea for bettering shareholder liquidity.
The board of PZCN stays dedicated to constructing on the robust operational progress we have now seen in H1 of FY25, exploring various mechanisms for restoring our internet property to a optimistic place and to working intently with our shareholders and the broader stakeholder ecosystem throughout this course of.”
