The PZ Cussons Nigeria Plc on Friday informed investors through the Nigerian Exchange Limited that its minority shareholders, at an Extraordinary General Meeting (EGM) on March 13, 2025, in Abuja, voted against the board’s proposal to convert an outstanding intercompany loan of US$34,264,544 (equivalent to ₦51,795,312,646.72) into equity.
The loan, the company said in a notification, was owed to PZ Cussons (Holdings) Limited.
Although there was strong minority shareholder support for the transaction, according to the notification by ALSEC Nominees Limited, the Company Secretary, “a significant minority shareholder bloc voted against the transaction.”
Consequently, the company said “the approval threshold was not met,” explaining that the debt conversion was proposed to resolve challenges stemming from Nigeria’s currency devaluation and historical forex liquidity challenges.
In June 2022, for example, it recalled that “PZCH advanced an intercompany loan of US$40.26 million to help PZCN settle foreign currency payables for raw materials and operational costs due to the ongoing forex scarcity.
“Following the liberalisation of the foreign exchange market in June 2023 and subsequent Naira devaluation, the foreign exchange debt position (resulted in) an exchange loss of ₦157.9bn, resulting in a ₦76bn loss after tax and a negative shareholders’ equity position of ₦27.5bn for the financial year ended 31 May 2024.
“Despite strong operational performance — with 34% and 42% year-on-year revenue growth for the periods ended 31 May 2024 and 30 November 2024 respectively, continued Naira depreciation has further eroded operational profits, worsening the negative net equity position to ₦34.5bn as of 30 November 2024,” it stressed.
Reacting to the EGM’s outcome, the Chief Executive Officer (CEO) of PZ Cussons Nigeria, Dimitris Kostianis, while appreciating “shareholders for participating in the EGM and for their active engagement in the process.
“As a response to shareholder feedback received during the meeting, the majority shareholder amended the proposed conversion terms to reduce the level of debt to be converted and increase the conversion price, which would have reduced minority shareholder dilution and also ensured that the company remained compliant with the 20% free float requirement.”
He stressed that “there was very strong minority shareholder support for the transaction, with 663 of the 675 minority shareholders present at the meeting voting in favour.
“However, the 75% shareholding vote required to approve the resolution was not met, as 12 minority shareholders representing a significant shareholding voted against the resolution. In compliance with the law, the majority shareholder did not vote on the resolution,” he added.
Dimitris hinted that there were strong benefits for the company and shareholders from the proposed transaction, adding that converting the intercompany loan into equity, will significantly reduce the company’s exposure to foreign exchange volatility.
“Our balance sheet would have been strengthened, and future cash flow would have been freed up to be allocated to productive investments that support the Company’s profitable and sustainable growth ambitions.
“This would have established the basis for improving shareholder liquidity,” he stressed, expressing the commitment of the board to building on the strong operational growth seen in the 2025 half-year.
“Exploring alternative mechanisms for restoring our net assets to a positive position and to working closely with our shareholders and the broader stakeholder ecosystem during this process,” he added.
