PZ Cussons Nigeria Plc has announced plans to convert an intercompany loan of $34.26m, equivalent to N51.8bn, into equity.

In a notification to the Nigerian Exchange Limited recently, the company disclosed that the decision was reached during a special board meeting held on February 13, 2025. The board resolved to recommend the loan conversion to shareholders for approval at an Extraordinary General Meeting scheduled for March 13, 2025.

According to the statement, “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 proposed conversion is part of PZ Cussons Nigeria’s strategy to reduce its debt burden and improve its capital structure. By converting the debt into equity, the company aims to bolster its financial position and enhance shareholder value.

To facilitate the loan conversion, PZ Cussons Nigeria plans to increase its share capital from N1.99bn to N3.08bn by creating 2.19bn ordinary shares of 50 kobo each. These new shares will rank pari passu in all respects with the existing ordinary shares, ensuring equal rights for all shareholders.

The company stated, “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 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, “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.”

As part of the restructuring, the company will amend Clause 4 of its Memorandum of Association and Article 3 of its Articles of Association to reflect the new share capital. The amendment will state, “The share capital of the company is N3,082,596,841 divided into 6,165,193,682 ordinary shares of 50 kobo each.”

PZ Cussons Nigeria also disclosed 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 statement added.

Furthermore, the board is empowered to cancel any outstanding shares not allotted to PZ Cussons (Holdings) Limited upon the completion of the share allotment. The company assured shareholders that the process would be conducted transparently and in line with corporate governance standards.

“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 statement noted.

PZ Cussons Nigeria further clarified that its closed period, which commenced on February 6,2025, will remain in effect until 24 hours after this information is released to the market. During the closed period, directors, employees, and other insiders are prohibited from trading in the company’s shares.

The PUNCH reported that multinational consumer goods company PZ Cussons says it has commenced plans to sell its African subsidiaries to any interested buyer.