Lafarge Africa Plc has gained N115.08bn ($316.29m) as a result of its divestment from its South African subsidiary.
The company said the South African subsidiary, Lafarge South Africa Holdings, was sold after shareholders gave their approval at the 60th Annual General Meeting of the company.
It said a transaction closing meeting was held on July 31, 2019 where parties to the transaction exchanged documents as specified in the share purchase agreement.
According to a statement obtained from the NSE, the closing meeting, therefore, brought to a conclusion Lafarge Africa Plc’s divestment from LSAH.
The statement read in part, “As approved by shareholders at the last AGM, the agreed sale price of $316.29m was utilised to settle the entire principal ($293m) and accrued interest to July 31, 2019 ($23.29m) on the inter company loan owed to Caricement BV, which is the purchaser.”
Lafarge said with the set-off, it did not have any foreign currency debt on its books, with the only debt being the N33.6bn corporate bond due for redemption in June 2021 and N16bn Central Bank of Nigeria intervention loans through the Bank of Industry.
The Chairman, Lafarge Africa Plc, Mr Mobolaji Balogun, while speaking at the company’s AGM in Lagos, said the the board was unable to propose dividends due to its debt.
He said with the sale of Lafarge South Africa Holding Limited, as proposed by the board to shareholders, the only debt that would remain in the books of the company would be the second tranche of the corporate bond due for redemption in June 2021 and the subsidised loan in respect of the CBN Power Intervention Funds through the Bank of Industry.
Balogun said, “This significant reduction in debt holds prospects for dividend distribution in future.”
The Managing Director, Lafarge Africa, Mr Michel Puchercos, appreciated the understanding showed by the shareholders in approving the board’s proposals.
He said the management was determined to deliver on the trust reposed in it by the shareholders.
He said, “We are delighted with the understanding by our shareholders on the need to focus our business in Nigeria. The approval of the sale of Lafarge South Africa by the shareholders will cut debts service obligation and curtail substantially financial charges, which will have positive impact on liquidity and the opportunity to expand our operations in Nigeria.”