Lafarge Africa plans EGM, seeks shareholders’ nod to raise N90b fresh fund
The board of Lafarge Africa Plc, on Monday, wrote the Nigerian Stock Exchange (NSE), announcing plans for an Extra-Ordinary General Meeting (EGM), on September 25, 2018, in Lagos, to authorise the directors to raise up to N90billion in fresh capital by way of rights to existing shareholders.
The company will also seek approval “to apply any convertible loan, shareholder loan or any other loan facility due to any person, from the company, as may be agreed by the person and the company, towards payment for any shares or rights subscribed for in the rights issue.”The shareholders had at the 59th yearly general meeting on May 16, approved the raising of up to N100billion additional capital, subject to the approval of relevant regulatory authorities.
According to the notice signed by the Company Secretary, Mrs. Adewunmi Alode, shareholders at the EGM will also vote on special resolutions. These include the increase of the authorised share capital of Lafarge Africa from N5billion to N10billion “by the creation of 10 billion additional ordinary shares of 50kobo each, ranking pari passu in all respect with the existing ordinary shares of the company.”
Lafarge explained that the restructuring is aimed at improving its leverage position, its industrial operations as well as strengthening its profitability.The company also noted that reforms implemented by the firm to improve operational efficiency both in Nigeria, and South Africa, as well as effective management of its borrowing costs have impacted its performance as the Nigerian operations posted a profit of N1.9billion.
Lafarge reported a profit of N1.9billion in its Nigeria operation for the second quarter (Q2) of 2018. Strong market growth in Nigeria within the period reflected the end of the recession in the cement market.It attributed the success in Nigerian operations to operational stability, success of the turnaround plan implementation and volume improvement.
“Strong sales in Nigeria increased volumes in Q2 2018 by 18.7% (inclusive of export) and 9.6% in ReadyMix. In total, 68 kilotons of cement have been exported to Ghana with 28kt shipped in Q2 2018.”However, the company explained that lack of large infrastructural projects impacted volumes in our South Africa operations, but added that revenues improved by 7.7 per cent on the back of price increase in all segments in Q1 and foreign exchange effect.
The company noted that turnaround plan in South Africa, which focused on cost containment, commercial transformation and industrial stabilisation, is expected to improve its operations.The Chief Executive Officer, Lafarge Africa, Michel Puchercos, had said: “Our company saw strong market growth in Nigeria reflecting the end of the recession in the cement market. Cement demand has been on the rise since the beginning of 2018.”