Lafarge to convert Loans to Equity

…seek Shareholder approval for N140bn rights issue, UNICEM Merger

The Board of Directors of Lafarge Africa Plc will request approval from its shareholders to raise up to N140 billion additional capital through a rights issue at its forthcoming Annual General Meeting (AGM).

This was disclosed through a statement submitted to the Nigerian Stock Exchange on Monday, 15th May 2017, signed by Uzoma Uja, the company Secretary for Lafarge Africa.

The statement noted that the directors will also seek shareholders’ approval on the merger of Unicem into Lafarge Africa.

According to the statement, these proposals will strengthen the balance sheet and capital structure of the Company by reducing foreign currency exposure and optimizing the Lafarge Africa organization.

“Combined with improved operating performance, the proposals will strengthen Lafarge Africa’s expansion in Nigeria.”

The statement explained that, Unicem, a 100% owned subsidiary of the Company, has FX loan of approximately USD600m which was incurred for the completion of line 1 (2,5mtpa) and the commissioning of line 2 (2,5mtpa). Between Q4 2016 and April 2017, 50% of the outstanding loan was hedged using the Non Deliverable Futures window of the Central Bank of Nigeria.

The holding company, Lafarge Holcim Group however said it will take up its Rights and convert its portion of the loan to equity, when the Rights Issue is opened.

“All shareholders will have the same proportionate Rights in line with their shareholding in the Company.” The statement added.