NIGERIA – Lafarge Africa Plc, a pan African cement manufacturer headquartered in Nigeria is set to offload Lafarge South Africa Holding Limited (LSAH)to LafargeHolcim Group for the sum of US$316.2 million.
This follows the shareholder’s approval of the proposed sale of the unit during the company’s Annual General Meeting (AGM) which happened in Lagos, Nigeria.
Speaking on the approval of the proposed sale of its South African subsidiary, the company’s Chairman, Mr Mobolaji Balogun, disclosed that LSAH sale would be beneficiary to all shareholders.
According to Balogun, the sale would ultimately enhance the shareholders’ value in Lafarge Africa Plc. He stressed that this is of utmost importance for the company’s board.
The chairman noted that the transaction, alongside the company’s transformation which had been undergoing processes for 3years, would ensure that the company does not have any foreign currency debt.
“The process of transformation of this company, which we undertook some three years ago, is now moving very swiftly toward solid foundation.
“Over the last three years, we have succeeded in reducing the company’s debts by over 1.1 billion dollars through the support of shareholders.
“Following the conclusion of the proposed sale, Lafarge Africa’s shareholder’s loan of 293 million dollars as at July 31, the only existing foreign currency loan in the books of the company, will be completely paid off.
“Over and above that, because the entity in South Africa also have some substantial debt, when that sale is completed on July 31, it will also lead to the deconsolidation of around 115 million dollars debt related to Lafarge South Africa,” he explained.
Balogun highlighted that the deal will bring about a reduction in Larfarge’s debt of about US$470 million.
“It will also include the subsidised loan in respect of the Central Bank of Nigeria (CBN) Power Intervention Funds through the Bank of Industry (BoI). This significant reduction in debt holds prospects for dividend distribution”
“We are delighted with the understanding by our shareholders on the need to focus on our business in Nigeria.
“The approval of the proposed sale of Lafarge South Africa by the shareholders will cut debts service obligation and curtail substantially financial charges which will have a positive impact on liquidity and the opportunity to expand our operations in Nigeria,” he said.