The yearly loss of massive gains made by Lafarge Africa from Nigeria market to failing business fortunes of Lafarge South Africa Holdings Proprietary Limited (LSAH), has come to an official end at the recent Annual General Meeting of the cement solutions provider.
This is coming on the heels of the votes of shareholders of Lafarge Africa Plc at the meeting for the sale of its 33.82 million ordinary shares in Lafarge South Africa Holdings Proprietary Limited (LSAH), to Caricement B.V, a subsidiary of LafargeHolcim Group.
The shareholders expressed optimism that the move when completed, will among other things, turn around the ailing fortunes and boost profitability of Lafarge Africa and further increase value on investment through dividend.
Speaking at the company’s 60th yearly AGM in Lagos, the board Chairman, Mobolaji Balogun, said $316.289 million proceeds from the planned sale will enable it pay off Lafarge Africa shareholder loan as at July 31, 2019, and represents the only existing foreign currency loan in its books.
Balogun agreed that LSAH’s operations have been faced with a challenging market in South Africa, with shrinking demand in an aggressively competitive market, but after due deliberation, its disposal was the best option to restrict further downside, especially for minority investors.
He revealed that upon hostile operating environment, the company made significant progress across board considering the fact that “The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margins in the Nigerian operations stood at 27 per cent at close of the year, resulting from a stable pricing environment, stabilising industrial operations, the use of alternative energy, and the implementation of our commercial and logistics performance improvement plan.
“On the basis of the results for the year, the board is unable to propose dividends. With the sale of LSAH as proposed by the board to shareholders, the only debt that will remain on the books of the company will be the second tranche of the corporate bond due for redemption in June 2021,” Lafarge Africa Plc chairman averred.
