Business Hilights
Tracking Nigeria's Headline Business News Online

Advert space

Advert space

Lafarge Africa sees Rights Issue as step to capacity expansion, profitability

Leading indigenous construction solutions providers, Lafarge Africa Plc, has described its planned rights issue at the floor of the Nigerian Stock Exchange (NSE) as another opportunity to boost investments and drive to capacity expansion feats capable of delivering good returns to shareholders.

Giving further details of the deal during the company’s fact behind right issue of N131.65bn at the floor the NSE last week, the management team led by the Group Managing Director, Michel Puchercos, averred that the decision of the group to float the Rights Issue is to better the lots of the company and situate it for consolidation via capacity expansion.

In his remarks, the Chairman of the company, Mobolaji Balogun, said in the rights circular that “The rights issue is probably one of the largest ever rights issue transaction undertaken by a multinational in our domestic market and represents a huge opportunity for resolving the exposure of the company to foreign currency risks”.

“In over a decade, the company has not had any injection of equity. Most investments in the company had been through internally-generated revenue or debt from the majority shareholder.”

In strong assurance, the Chief Financial Officer of the company, Bruno Bayet, told market stakeholders that the proceeds of the right issue will be used for refinancing a portion of the company’s foreign currency-denominated shareholders loans, by way of debt to equity conversion, finance working capital requirement and expand operations.

According to him, the proceeds of the rights would resolve equivalent of $270m of the debt effectively, almost halving the foreign exchange exposure

Business Hilights recalls that Lafarge Africa Plc., is offering 3,097,653,023 new ordinary shares at N42.50 kobo per share, based on a ratio of five new ordinary shares for every nine ordinary share.

The issue price represents a discount of approximately 17.5 per cent to the closing price of N51.48 kobo as at September 22, 2017. The offer which opened on November 24, 2017 will close on December 15, 2017.

Investigations by our correspondents showed that the rights Issue may be oversubscribed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More