Summary
- Nestle Nigeria Plc will continue to provide loans and payables to its subsidiaries and affiliates as part of its related party support, according to resolutions reached in its Annual General Meeting.
- As of March 31, 2023, Nestle Nigeria’s related party support amounted to N251 billion, consisting of N159.8 billion in related party loans and N92 billion in payables due.
- The loans are granted at market interest rates and are used to finance working capital needs, capital expenditure projects, and operational expenses, while the payables are trade payables for raw materials, packaging materials, and finished goods from Nestle SA and other Nestle entities.
Nestle Nigeria Plc, one of the largest food and beverage companies in Africa, has announced that it will continue to provide related party support to its subsidiaries and affiliates in the form of loans and payables.
The company disclosed this in a release of the resolutions reached in its Annual General Meeting published on the Nigerian Exchange Limited (NGX).
Excerpt of special resolution
- “That the general mandate given to the Company to enter into recurrent transactions with related parties for the Company’s day-to-day operations, including the procurement of goods and services, on normal commercial terms in compliance with the NGX Rules Governing Transactions with Related Parties or Interested Persons be and is hereby renewed.”
According to the report, Nestle Nigeria’s related party support amounted to N251 billion as of March 31, 2023. This is made up of N159.8 billion in related party loans and N92 billion in payables due.
The company stated that the loans and payables are part of its strategy to create shared value for its stakeholders and to support its operations in Nigeria and other African countries.
Nestle Nigeria explained that the related party loans are granted to its subsidiaries and affiliates at market interest rates and are repayable within one year. The loans are used to finance working capital needs, capital expenditure projects, and other operational expenses.
Nestle statement on related party transactions
- “The Company has contractual relationship with related companies in the ordinary course of business. In addition, the Company (and other operating companies of Nestlé in Central and West Africa) executed a Shared Services Agreement with Nestlé Central and West Africa Limited. The purpose of the agreement is to ensure the provision of common operational shared services to all members of the Nestlé Group of companies operating within the Central and West Africa Region, which each member company had previously provided to itself on standalone basis with the attendant duplication of functions, resources and costs. The allocation of the costs to each company is based on Activity Based Costing.”
The payables due are mainly trade payables arising from the purchase of raw materials, packaging materials, and finished goods from Nestle SA and other Nestle entities.
The company added that it collaborates with various stakeholders, including farmers, suppliers, customers, consumers, civil society organizations, governments, and multilateral organizations, to address the challenges and opportunities in the food and beverage industry.
Nestle Nigeria is a subsidiary of Nestle SA, the world’s largest food and beverage company. Nestle Nigeria has been operating in Nigeria since 1961 and has three manufacturing sites, eight branch offices, and a head office located in Lagos.
The company produces and markets several iconic brands, including Maggi, Milo, Golden Morn, Nescafé, and Nestlé Pure Life.