Shareholders of Larfarge Africa Plc have injected ₦132 billion through a rights issue. Lafarge also made history as the rights issue is the biggest ever by a Nigerian company.
The company, last year announced its intentions to raise ₦131.65 billion through a rights issue of about 3.1 billion ordinary shares of 50 kobo each at ₦42.50 per share.
The new shares pre-allotted to existing shareholders on the basis of five new ordinary shares for every nine ordinary shares held at the close of business on November 1, 2017.
The acceptance list opened on Friday, November 24, 2017, and ran till the close of business on last December 15, 2017.
In a regulatory filing at the Nigerian Stock Exchange (NSE), Lafarge Africa indicated that it recorded a 100 percent subscription to its recent ₦131.65 billion rights issue. A total of 3, 577 acceptance forms were received for the 3,097,653,023 ordinary shares.
What will the funds be used for ?
Lafarge Africa will use part of the proceeds to cut its debt by around $270 million, almost halving its foreign currency exposure.
Lafarge Africa inherited a $507 million in shareholder loans and $88 million of third-party foreign currency debt when it acquired Nigeria’s third-largest cement manufacturer United Cement Company of Nigeria (UNICEM) in 2015.
This debt profile exposed the cement company to a heavy foreign currency loss after the Naira lost more than a third of its official value when the Central Bank of Nigeria (CBN) depreciated the currency. This led to the company making a pre-tax loss of ₦22.82 billion full year ended 31st December, 2016.
Lafarge Holcim was in 2015 formed from a global merger of Lafarge and Holcim. Lafarge Holcim, the majority shareholder has a 71.4% stake in the Nigerian unit is the world leader in building materials industry with a local presence in 90 Countries, over 100,000 employees and 374,000 million metric tons of installed capacity worldwide.
Lafarge is currently trading at ₦52.50 in today’s NSE trading session, down 0.94%.