Cement manufacturer, LaFarge Africa announced that it would be selling its South Africa operations for $317 million to Caricement B.V.
This announcement was made at the company’s 60th Annual General Meeting (AGM) in Lagos on Monday. Speaking on the matter, the company’s Chairman, Mobolaji Balogun, explained that LSAH sale would be beneficiary to all shareholders.
The company intends to use the proceeds to pay-off a related-party loan, amounting to $293 million.
With this transaction, the company would not have any foreign currency debt.
Lafarge, in a corporate filing on Wednesday, said the transaction will be with Caricement B.V, an indirect subsidiary of Lafarge Holcim Limited.
“The Proposed Sale is expected to enhance the value of shareholders‟ investments in Lafarge Africa. The proceeds of the Proposed Sale (US$317m) will be used to completely extinguish Lafarge Africa‟s shareholder loan of US$293 million as at July 31, 2019, and related interest due.
“This full repayment of the shareholder loan will protect and preserve Lafarge Africa‟s net Income and cash flows. The improvement in cash-flow and net income, resulting from the reduction in debt service outflows, will enable Lafarge Africa to consider additional investments in cement production capacity and to improve its market share in Nigeria.”
The terms of the transaction to the shareholders for consideration at the 60th Annual General Meeting in July, as a special business, which will be voted on by way of an ordinary resolution in accordance with regulatory laws,” the statement reads.
“Over the last three years, we have succeeded in reducing the company’s debts by over 1.1 billion dollars through your support and through the support of our largest shareholder.”
“We have also succeeded now, essentially in focussing the business of the Nigerian market where the opportunities and prospects are very evident and clear to each and everyone of us,” Balogun said.
The transaction is expected to be completed in the third quarter of 2019.
