PPC shares slump af­ter CE re­signs abruptly

The Star Early Edition - - BUSINESS REPORT - Roy Cokayne

THE PRICE of PPC shares dropped by 9 per­cent to close at R4.45 a share yes­ter­day af­ter the listed ce­ment and lime pro­ducer re­ported that chief ex­ec­u­tive Dar­ryl Cas­tle had re­signed and re­ports emerged that talks about a pro­posed merger be­tween PPC and ri­val AfriSam were about to col­lapse.

PPC said the com­pany and Cas­tle had “agreed to part ways” and Cas­tle had re­signed his PPC group di­rec­tor­ships and would be “pur­su­ing other in­ter­ests”.

How­ever, PPC said Cas­tle would be avail­able to the PPC group for a pe­riod of six months to en­sure a smooth han­dover.

PPC chair­per­son Peter Nel­son said the nom­i­na­tions com­mit­tee of the board would im­me­di­ately com­mence the process to ap­point a per­ma­nent chief ex­ec­u­tive.

Jo­han Claassen, the manag­ing direc­tor of PPC’s South African ce­ment busi­ness has been ap­pointed in­terim chief ex­ec­u­tive of PPC and an ex­ec­u­tive direc­tor of the group with im­me­di­ate ef­fect.

Claassen has been with PPC for 28 years and has ex­pe­ri­ence in all facets of the busi­ness, the com­pany said

PPC added that Cas­tle had joined the board at a dif­fi­cult time and was in­stru­men­tal in sta­bil­is­ing the com­pany and over­see­ing the com­mis­sion­ing of sev­eral new pro­jects “for which the board is most grate­ful”.

De­par­ture

Cas­tle was ap­pointed chief ex­ec­u­tive of PPC in De­cem­ber 2014 fol­low­ing the ac­ri­mo­nious de­par­ture of for­mer chief ex­ec­u­tive Ketso Gord­han, who re­signed and the board re­fused to al­low him to re­tract his res­ig­na­tion.

Cas­tle has over­seen the de­liv­ery of PPC’s African build pro­gramme with the de­liv­ery of new plants in the Demo­cratic Repub­lic of Congo, Ethiopia, Rwanda and Zim­babwe, which had the aim of gen­er­at­ing 40 per­cent of its to­tal rev­enue from out­side of South Africa by this year, and a R4 bil­lion rights is­sue last year to re­lieve the pres­sure on the com­pany’s bal­ance sheet.

Cas­tle con­firmed last month that PPC wanted to be the ar­chi­tect of the con­sol­i­da­tion of the ce­ment in­dus­try in South Africa and saw its prospec­tive merger with AfriSam as the first step in this process.

How­ever, Bloomberg re­ported yes­ter­day that merger talks be­tween PPC and AfriSam were close to fall­ing apart for the sec­ond time, be­cause the com­pa­nies had failed to agree on is­sues rang­ing from man­age­ment con­trol to the struc­ture of the deal.

Bloomberg said that a suc­cess­ful tie-up was not yet off the ta­ble and a fi­nal de­ci­sion could be made by the end of next month. The last at­tempt to com­bine the busi­nesses failed in March 2015.

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