The conversion of an outstanding $7.72 million (N7.04 billion) intercompany loan owed to Cadbury Schweppes Overseas Limited, the company’s principal shareholder, to equity has been approved by Cadbury Nigeria Plc’s shareholders.
The shareholders gave their approval at the Extraordinary General Meeting, which was held in Lagos recently.
The company disclosed that between February 2021 and September 2023, Cadbury Schweppes Overseas loaned $23 million to Cadbury Nigeria to help settle outstanding third-party loans, which the company had obtained to fund its raw material imports and other input costs, in an explanatory statement on the proposed debt-to-equity conversion filed with the Nigerian Exchange Limited in January.
“The loan would be converted into equity by the allotment of 402,082,657 ordinary shares of 50 kobo each to Cadbury Schweppes Overseas Limited,” announced Cadbury Nigeria following the EGM, with the agreement of the shareholders.
The company’s petition to raise its share capital from N939,100,981 to N1,140,142,309.50 was also approved by shareholders.
The Managing Director of Cadbury Nigeria, Oyeyimika Adeboye, explained that the company’s decision to convert its debt to equity was motivated by the difficulties it was having finding dollars to pay back its foreign currency loans because of the ongoing shortage of foreign currency in the country.
A wide range of indigenous, individual, and institutional investors own the remaining shares in Cadbury Nigeria, with Cadbury Schweppes Overseas Limited, an entity presently owned by Mondelēz International Inc., owning 74.97 per cent of the company.
The conversion will result in a fall in the shareholding of other shareholders from 25.03 per cent to 20.61 per cent, and an increase in Cadbury Schweppes Overseas’ shareholding from 74.97 per cent to 79.39 per cent.