Anglo-Dutch consumer goods group Unilever will take part in a 58.85 billion naira ($162 million) share sale by its Nigerian unit and will not convert a loan made to the subsidiary into equity, Unilever Nigeria said on Wednesday.
Unilever Nigeria, 60.05 percent owned by Unilever, is aiming to raise money to pay off loans owed to related firms and to give it some flexibility in the event of a further devaluation of the naira, its chief financial officer said.
The business plans to offer 1.96 billion shares at 30 naira each, a 26 percent discount to its Wednesday’s price of 40.51 naira. The sale ends on Sept. 8.
Finance chief Adesola Sotande-Peters told analysts on a conference call that Unilever Nigeria owed sister firms in Ghana and elsewhere money in foreign currency and wanted to repay that with proceeds from the share sale.
She said the unit’s total indebtedness in dollars was $120 million, with around $64 million owed to its parent.
Unilever granted its Nigerian unit a $108 million loan to help it with dollar shortages in Africa’s biggest economy, brought on by low oil prices, the unit said in its prospectus.
Despite recession in Nigeria, the West African country remains Africa’s single largest consumer market.
Last week, Unilever Nigeria announced a 238 percent rise in half-year pretax profit to 5.04 billion naira.
However, analysts say Nigerian consumers are shifting towards more affordable products due to double-digit percentage increases in inflation.
Unilever Nigeria said it would continue to invest in distribution and remain focused on consumers’ changing demands. It plans to boost local production and source more raw materials in Nigeria.