Shares of cement maker, Lafarge, on Thursday gained the most in over five months after it announced plans, a day before, to wipe off heavy debt from its balance sheet and showed significant improvement in its recently released financial scorecard for full year 2018 and the first quarter of 2019.
Shares of the company opened at N9.55 p on Thursday but gained 9.95 percent in the day’s trading to close at N10.5 per share. The cement maker has cut its year-to-date loss to -15.66 percent.
Lafarge on Wednesday disclosed plans to deleverage through the divestment of its South African subsidiary to Caricement B.V, an affiliate of Switzerland-based parent company Lafarge Holcim.
The deal was signed on May 31, 2018 for a cash consideration of N114 billion ($317 million), the company said. The closure of the proposed sale is expected to take place in Q3 2019 subject to shareholders’ and regulatory approval.
Lafarge revealed that it would use the proceed from the sale of its South-Africa business alongside capital raised from an earlier rights issue held to extinguish completely, a shareholder loan of $293million along with related expenses.
“The Rights issue together with the divestment of South Africa Operations will deleverage Africa by c.N246bn, enabling to fully repay USD shareholder loan and short- term overdraft,” Michel Puchercos, the company’s CEO said.
In Q1, Lafarge turned the corner to post a profit of N3.1 billion, despite a 2.6 percent fall in revenue. The cement maker also pared its full-year loss by 75 percent in 2018.
Segun Adams
