PZ Cussons Faces Shareholders Backlash Over $34.3m Debt-To-Equity Conversion Plan
Shareholders under the aegis of the New Dimensional Shareholders Association have voiced strong opposition to PZ Cussons Nigeria Plc’s proposed $34.3m debt-to-equity conversion, describing the plan as unfair to minority shareholders and a move that leaves them marginalized.
PZ Cussons Nigeria Plc announced its intention to convert a $34.3m loan owed to its parent company, PZ Cussons (Holdings) Limited, into equity.
This transaction would result in an increase in the parent company’s stake in the Nigerian subsidiary from 73.27 percent to 82.79 percent.
According to PZ Cussons Nigeria, the outstanding loan of $34.26m (approximately N51.8bn) will be converted into equity at a share price of N23.60 per share.
This price represents an 18 per cent discount compared to the company’s current market price. The conversion will lead to the issuance of 2,194,716,637 new ordinary shares of 50 kobo each, thereby raising the company’s share capital from N1.985bn to N3.082bn.
The company has scheduled an Extraordinary General Meeting (EGM) in Abuja on March 13, 2025, to discuss and vote on the proposal.
President of the New Dimensional Shareholders Association, Mr. Patrick Ajudua expressed his dissatisfaction with the plan in an exclusive interview with THE WHISTLER.
He criticized the move, stating, “This plan is a deliberate attempt to dilute the value of our shares despite continuous warnings from shareholders regarding the company’s financial performance and the sale of assets. The company now expects minority shareholders to bear the burden of its financial losses.”
Ajudua further lamented the deteriorating relationship between minority shareholders and the majority shareholder, PZ Cussons (Holdings), asserting that the proposed transaction has eroded the trust that once existed between both parties.
PZ Cussons has also faced shareholder disagreements over its delisting offer price. Since November 2023, the company has made several attempts to delist from the Nigerian Exchange (NGX).
Its initial offer of N21 per share was rejected by shareholders, prompting an increase to N23 per share, which was also refused. The Securities and Exchange Commission (SEC) further complicated the company’s delisting plans by objecting to the offer.
As the EGM approaches, minority shareholders are gearing up to challenge the proposal, emphasizing the need for equitable treatment and transparency in the company’s financial decisions.
