Minority shareholders of PZ Cussons Nigeria Plc (PZCN) have voted against the proposed conversion of a N51,79 billion ($34.26 million) intercompany loan into equity at the company’s Extraordinary General Meeting (EGM) held on March 13, 2025, at the Transcorp Hilton Hotel, Abuja.
According to the Nigerian Exchange Group, the proposal, aimed at addressing foreign exchange losses and strengthening the company’s financial position, failed to meet the required 75 percent approval threshold despite strong minority shareholder support.
It said, “Of the 675 minority shareholders present, 663 voted in favor, but 12 key shareholders representing significant holdings opposed the resolution.”
The company disclosed that in June 2022, PZ Cussons (Holdings) Limited (PZCH) extended a $40.26 million intercompany loan to PZCN to help settle foreign currency obligations for raw materials and operational costs amid a forex shortage.
However, following the liberalisation of Nigeria’s foreign exchange market in June 2023, the naira devaluation led to an exchange loss of N157.9 billion, culminating in an N76 billion loss after tax and a negative shareholders’ equity position of N27.5 billion for the financial year that ended May 31, 2024.
Despite strong operational growth, with revenue increasing 34 percent year-on-year for the year ending May 2024 and 42 percent year-on-year for the six months ending November 2024, continued currency depreciation further eroded the company’s financial stability, worsening its negative net equity to N34.5 billion as of November 30, 2024.
Speaking on the EGM outcome, Dimitris Kostianis, CEO of PZCN, expressed appreciation for shareholder engagement, emphasising that the majority shareholder had amended the terms to reduce debt conversion and increase conversion price, aiming to protect minority shareholders and maintain compliance with Nigeria’s 20 percent free float requirement.
“We believe the proposed transaction offered strong benefits, including reducing foreign exchange exposure, strengthening our balance sheet, and freeing up future cash flow for productive investments. However, we respect the outcome and will continue exploring alternative solutions to restore the company’s financial health,” Kostianis stated.
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