Lafarge Africa seeks approval to launch 132 bln naira rights issue

23 October 2017

Lafarge Africa is expecting regulatory approval from Nigerian authorities for a 131.65 billion naira ($431.43 million) rights issue as it focuses on Nigeria for growth and expands into Ghana, its CFO said on Friday.

As part of its plan to refinance its debt, the subsidiary of Franco-Swiss group LafargeHolcim said it would also issue a 25 billion naira of commercial paper on Monday under a 60 billion naira programme. Lafarge announced a loss of 40.37 billion naira last year, weighed down by foreign currency debt in a market in recession.

But it has swung into profit this year and announced a pretax profit of 1.09 billion naira in the first nine months of 2017 on lower volumes, Bruno Bayet told Reuters.

Those profits were lower than the half-year and first-quarter performance. The company is invested mainly in Nigeria where it has around 11 million tonnes capacity with another 4 million tonnes in South Africa. It started exports to Ghana in the third quarter.

Bayet said the company had gained market share in Nigeria though volumes fell 18.6%. Nigeria exited recession in the second quarter but growth remains fragile. He said the short-term focus is on Nigeria and growth in South Africa was disappointing, leading to a management change.

Parent firm LafargeHolcim is backing the cash call and would subscribe to its shares including converting its quasi-equity in the company to ordinary shares. Bayet said the company was looking at a debt position of below 200 billion naira after the restructuring compared with around 225 billion naira now.

Shares in Lafarge Africa, which rose 37% this year, were unchanged on Friday at 56 naira, valuing the cement company at 307.47 billion naira.

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