Loan conversion: Cadbury lists 402 million shares on stock exchange
Following the conversion of about N7.04bn intercompany loan to equity, Cadbury Nigeria Plc, has listed 402,082,657 ordinary shares of 50 Kobo at N17.50 per share on the Nigerian Exchange Limited.
According to the weekly market report released by the NGX on Friday, the shares have been listed on the daily official list of the local bourse.
“With this listing of the additional 402,082,657 ordinary shares, the total issued and fully paid up shares of Cadbury has now increased from 1,878,201,962 to 2,280,284,619 ordinary shares of 50 Kobo each,” the report stated.
In February, the shareholders of Cadbury Nigeria Plc approved the conversion of an outstanding intercompany loan of $7.72m (N7.04bn) owed to its majority shareholder, Cadbury Schweppes Overseas Limited, to equity.
In an explanatory statement on the proposed debt-to-equity conversion filed with the Nigerian Exchange Limited in January, the company revealed that between February 2021 and September 2023, Cadbury Schweppes Overseas, loaned $23m 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.
The Managing Director of Cadbury Nigeria, Oyeyimika Adeboye, attributed the debt-to-equity decision to the challenges faced in sourcing dollars to repay the company’s foreign currency-denominated loans, due to persistent foreign currency scarcity in the country.
In an earlier interview with our correspondent, the Managing Director of Parthian Partners, Oluseye Olusoga, said, “The Cadbury situation is not that bad for local investors. If you owe money, it comes with a fine. That debt could just keep ballooning. So, this is like a cure.
“So, the question is, how do you keep it from growing again, so it does not become a liability? That was why I said we need to focus on how to get local substitutes and how we export more of what we manufacture.”
Cadbury Schweppes Overseas Limited, an entity currently owned by Mondelēz International Inc, holds a 74.97 per cent stake in Cadbury Nigeria, while the remaining shares are held by a diverse group of indigenous, individual, and institutional investors.With the conversion, Cadbury Schweppes Overseas shareholding will increase.
