The Securities and Exchange Commission (SEC) has declined the request made by PZ Cussons Nigeria Plc to acquire all shares held by minority shareholders in the Nigerian subsidiary.
The development was disclosed on Wednesday in a regulatory filing by PZ seen by NewsNGR.
PZ said it, “Notifies the Nigerian Exchange Limited (“NGX”) and the investing public that the Securities and Exchange Commission (“SEC”) has declined the Company’s request for its No Objection to PZ Cussons (Holdings) Limited’s (“the majority shareholder”) intention to acquire the shares held by all the other shareholders of PZCN at an offer price of ₦23 per share (the “Proposed Transaction”).
“The Board will communicate further developments to shareholders in due course.”
The plan to acquire minority shares began in September last year when PZ first offered N21 per share which they resisted and threatened to approach court for redress.
The company in November raised the offer to its shareholders to N23 per share after it received advise from financial experts.
PZ is controlled by PZ Cussons Holdings Limited, UK which owns 2.9 billion shares representing 73.27 per cent of the share while the remaining 26.73 per cent is widely held by the minority shareholders, findings by NewsNGR reveal.
AMCON and PFA hold 98.79 million shares which is 2.49 per cent of the company, Mr P. Usoro has 1 million shares or 0.003 per cent while 24.21 per cent which is 961.27 million shares are held as free float.
Hit by a negative net assets position of N23.2bn, PZ Cussons Nigeria in February 2024 said it is under pressure to settle its debt to its core investor, PZ Cussons Group, suppliers, and other providers of credit.
PZ said in February, “If the Company is not able to obtain the requisite regulatory and shareholder approvals to proceed with the proposed scheme, the Company will be required to explore with its creditors, which are primarily members of the PZ Cussons group, ways to address the Company’s negative net asset position and repay or settle outstanding amounts owing to its creditors.
“This could include measures such as equity issuance, debt for equity conversion, rights issues, asset sales or similar. Such measures may significantly dilute or otherwise impact existing shareholders.”
The depreciation of the naira by over 98 per cent in 2023 led to a foreign exchange loss of N87bn on PZ’s foreign currency-denominated trade obligations, negatively impacting its operating result.
The company’s operating loss is the key driver of the N23.2bn negative equity that was recorded as of 30 November 2023.
The company’s books reveal that the Group’s financial liabilities, most of which are denominated in foreign currencies, were at N178bn, while the total assets were at N154.8bn.