Lafarge Africa Applies to Raise N132bn through Rights Issue
Lafarge Africa Plc has formally applied to the Nigerian Stock Exchange (NSE) to raise N132 billion fresh capital from existing investors through a Rights Issue.
Shareholders of the cement manufacturing firm had in June approved the proposal by the company to raise about N140 billion.
However, the company has formally applied to raise about N132 billion through the issuance of 3,097,653,023 ordinary shares of 50 kobo each at N42.50 per share on the basis of five new ordinary share for every nine ordinary share s held as at November 1, 2017.
Shareholders of the company had given the approval for the rights issue with a charge to the directors that the company would remain listed on the NSE.
The Chairman of Lafarge Africa, Mr. Bolaji Balogun, had said that the rights issue, which is the first since 2005, represents an important step in resolving the company’s foreign currency exposure and impact on its earnings.
According to him, apart from reducing debt of the company, the right issue provides all shareholders opportunity to increase their investment in the company.
“The recapitalisation is positive and our largest shareholder, LafargeHolcim has committed to subscribing to their rights in full through a conversion of existing shareholder loans. This investment is a strong indication of the groups’ continued belief in the Nigerian story. It is the largest right issue and the largest investment in a listed company by an investor. It reduces our foreign currency exposure by approximately half, improves our cash flow and positions the company for our future capacity expansion plans,” he said.
Responding to request by the shareholders that the company should not be delisted after the right issue, Balogun said if the LafargeHolcim was considering that option, it would not commit to make such huge investment in the company.
Speaking on the company’s turn-around plan launched in the third quarter of 2016, the chairman said it has started yielding results.