Lafarge Africa Plc, a notable building materials solution provider, is seeking the endorsement of the Securities and Exchange Commission (SEC) for the adoption of its N89.2 billion rights issue.
The company’s Board of Directors has approved the proposed allotment for the rights issue authorising the joint issuing houses to file the proposed allotment for clearance by SEC.
The company sent a notice to the Lagos bourse December 2018 to indicate interest to raise N89.2 billion through rights issue.
Acceptance list for the rights issue opened December 17, 2018 and closed January 28, 2019. The cement maker offered 7.43 billion ordinary shares of 50 kobo at N12 per share on the basis of six new ordinary shares for every seven ordinary shares held at close of Business December 4, 2018.
The N89.2 billion right issue indicates the second rights issue of the cement company in fourteen months. In the penultimate month of 2017, the cement maker issued about 3.1 billion ordinary shares of 50 kobo at 42.50 per share.
The structure of the latest rights issue tallys with that of November 2017, plus a convertible deal which allows its principal investor, Lafarge Holcim convert debts into equities.
There are concerns that the debt-equities conversion coupled with the dispassion of investors towards the primary market could increase the shareholding of its major investor after the rights issue.
The cement maker must now ensure that minority shareholders have at least 20 percent stake to prevent delisting at the Customs street.
The major investor took advantage of the November 2017 rights issue to raise its shareholdings by 4.97 percentage points to 76.32 percent from 71.35 percent before the allotment.
Lafarge Holcim, with 76.32 percent shareholding, has more than the required 75 percent needed for major corporate changes.
The Chairman of the Board, Mobolaji Balogun said that the additional capital raised from the N89.2 billion rights issue would help reduce leverage in the company’s balance sheet and foster growth & expansion.
According to him, the company anticipates a stable pricing environment and benign economic conditions in its Nigerian market, while turnaround plans are on-going in South African market.
Share price of WAPCO remain unchanged at N13 at close of business Wednesday, Februrary 20, and gained 4.42 percent year-to-date.
Lafarge Africa Plc provides cement products and solutions. It offers concrete, aggregates as well as building and construction material for landmark projects. The company serves customers in Nigeria and South Africa.
ISRAEL ODUBOLA
