Lafarge Africa to Raise N89bn through Rights Issue

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The board of directors of Lafarge Africa Plc said the company will be raising N89.21 billion through a rights issue according to a release signed by the company secretary sent to the Nigerian Stock Exchange (NSE), on Monday.

The statement stated said that shareholders of the company at an Extra Ordinary General Meeting (EGM) held on September 25, 2018 gave approval for the rights issue. Lafarge Africa will raise N89.21 billion by way of a rights issue at N12 per share, by issuing six new shares for every seven shares held by shareholders at the qualification date, which will be announced.

“The rights price represents a 10.45 per cent discount on Lafarge Africa’s traded closing price of N13.40 as at December 3, 2018.” It further stated that the regulatory approval process for the rights issue is ongoing. The rights issue, which is in line with the company’s plan to grow and strengthen its operations will also involve restructuring of its outstanding short term $315 million shareholder loans.

At the EGM, the chairman of Lafarge, Mobolaji Balogun explained that “the additional capital to be raised will further help to deleverage the company’s balance sheet and provide head room for the expansion of our business.”

The company’s refinancing plan, according to the chief executive of the company, Michel Puchercos, is aimed at preparing for future development in Nigeria, improving the company’s leverage as well as strengthen its profitability.

Recall that Lafarge Africa, on November 24, 2017, opened a rights issue to raise N131.65 billion by way of 3.098 billion ordinary shares of 50 Kobo each at N42.50 per share on the basis of five new ordinary shares for every nine ordinary shares held as at November 1, 2017.

Results for the nine months ended September 30 2018, show revenue increased from N223 billion in 2017 to N234 billion in 2018. The firm made a loss before tax of N14.3 billion in 2018, as against a profit before tax of N1 billion for the corresponding period of 2017. Loss after tax stood at N10.3 billion as against a profit after tax of N937 billion made in the corresponding period of 2017.

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