PZ Cussons Plc, the parent company of PZ Cussons Nigeria,
says the company is planning to sell its African subsidiaries.
In its ‘Results for the year ended 31 May 2024,’ published
on Wednesday, PZ Cussons said the company is looking at partial or full sale.
PZ Cussons said the sale will reduce the company’s exposure
to naira fluctuations.
According to the consumer goods manufacturer, the board has
received multiple interests in the sale of its African business.
“The Group is
currently engaged in a process to sell its St Tropez brand and is exploring
potential transactions that could lead to a partial or full sale of its Africa
business, having received a number of expressions of interest,” PZ Cussons
said.
“A partial or full sale of the Group’s Africa business could
materially reduce the Group’s exposure to fluctuations in the Naira exchange
rate.
“The Board has committed to using any proceeds from these
transactions to first reduce gross borrowings, and consequently the level of
the Group’s net interest cost.”
‘NIGERIANS ARE FACING UNPRECEDENTED ECONOMIC
DIFFICULTIES’
Jonathan Myers, PZ Cussons’ chief executive officer (CEO),
said Nigerians are facing unprecedented inflation and economic difficulties.
Myers said the naira devaluation has also significantly
impacted the company’s financials.
“The period was marked by a 70% devaluation of the Nigerian
Naira, which has had significant implications on our reported financials,” he
said.
“We have worked hard
to mitigate the impact of this on the Group, while continuing to serve Nigerian
consumers who are facing unprecedented inflation and economic difficulties.”
Commenting on the impact of the naira devaluation, PZ
Cussons said a foreign exchange loss of £107.5 million “primarily arose from
the translation and settlement of USD denominated liabilities in our Nigerian
subsidiaries and is wholly the result of the devaluation of the Naira, which
fell by 70% from 31 May 2023 to 31 May 2024”.
In April, Myers said the company was reviewing its brands
and geographies over macroeconomic challenges and complexities in Nigeria.
He spoke a month after the Securities and Exchange
Commission (SEC) rejected PZ Cussons’ request to acquire the shares of minority
shareholders in PZ Cussons Nigeria Limited, its Nigerian subsidiary.
In September 2023, PZ Cussons had shown interest in buying
the remaining 26.73 percent minority shares in its Nigerian subsidiary, at a
price of N21 per unit.
As of May 31, PZ Cussons holds a 73.27 percent stake in the
Nigerian subsidiary, which represents 2.90 billion shares, worth N45.53 billion
as of September 18.
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