Cadbury Nigeria faces a drop in market value due to a $7.7 million debt owed to Cadbury Schweppes Overseas Limited.
The company attributes the debt to the devaluation of the currency following the liberalization of the foreign exchange market in June 2023.
This led to an unrealized exchange loss of N20.6 billion and a loss after tax of N10.2 billion for the period ending September 30, 2023.
To address the outstanding debt, Cadbury Nigeria proposes a swap, converting the $7.7 million debt into equity.
Shareholders will vote on this conversion during an extraordinary meeting on February 8, 2024.
If approved, 402,082,657 shares will be created at N17.50 per share, handed to Cadbury Schweppes, increasing its stake from 74.97% to 79.39%.
While this move aims to deleverage the balance sheet and reduce foreign exchange risk, it will alter the combined stake of other shareholders from 25.03% to 20.61%.
The company believes this conversion will create value for shareholders, improve liquidity, and enhance financial standing.
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