PZ Cussons Nigeria to reduce debt burden by converting N51.8bn loan into equity
By Ralph Tathagata
To reduce its debt burden and improve capital structure, PZ Cussons Nigeria Plc has mapped out a strategy to convert an intercompany loan of $34.26m, equivalent to N51.8bn, into equity. By converting the debt into equity, the company targets to strengthen its financial position and augment shareholder value.
This development is contained in a notification the PZ Cussons Nigeria sent to the Nigerian Exchange Limited recently, stating that the decision was reached during a special board meeting held on February 13, 2025. According to the statement, the board resolved to recommend the loan conversion to shareholders for approval at an Extraordinary General Meeting slated for 13 March, 2025.
“The board hereby resolves to recommend the conversion of $34,264,544, equivalent to N51,795,312,646.72, out of the outstanding intercompany loan owed by the company to PZ Cussons (Holdings) Limited into equity.
“The share capital of the company will be increased from N1,985,238,522.50 to N3,082,596,841 by the creation of 2,194,716,637 ordinary shares of 50 kobo each, such shares to rank pari passu in all respects with the existing ordinary shares in the capital of the company,” the statement revealed.
“The newly created shares will be allotted to PZ Cussons (Holdings) Limited at N23.60 per share, reflecting the closing share price of PZ Cussons Nigeria on February 12, 2025,” the company explained.
It added, “The company is authorised to allot 2,194,716,637 ordinary shares of 50 kobo each to PZ Cussons (Holdings) Limited in consideration for the conversion of the intercompany loan at the price of N23.60 per share, being the share price of the company as at close of trading on February 12, 2025. Each share will rank pari passu in all respects with the existing ordinary shares.”
The company further reported that the board has been authorised to take all necessary steps and execute all documents required to effect the increase in share capital and the allotment of shares to PZ Cussons (Holdings) Limited. This includes seeking relevant regulatory approvals to ensure compliance with capital market regulations.
“The board is authorised to take all steps necessary to increase the company’s share capital and the allotment of shares to PZ Cussons (Holdings) Limited, subject to obtaining relevant regulatory approvals. The board is also authorised to increase, create, and allow the actual number of shares to PZ Cussons (Holdings) Limited so as not to exceed the number of shares in the resolution.
“The board is authorised to cancel any outstanding shares not allotted to PZ Cussons (Holdings) Limited upon conclusion of the allotment. The board is also empowered to take all lawful steps, pass all requisite resolutions, and do all other lawful acts necessary for giving effect to the resolution, including appointing relevant professional advisers and listing the new shares on Nigerian Exchange Limited,” the report stated.
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