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Tag: Lafarge Africa

  • Lafarge Africa completes N55b Unicem acquisition

    • Flour Mills exits cement business

    Lafarge Africa Plc has completed the acquisition of 30 per cent equity stake in United Cement Company of Nigeria (Unicem) Limited from Flour Mills of Nigeria Plc.

    In a regulatory filing at the Nigerian Stock Exchange (NSE), Lafarge Africa stated that Nigerian Cement Holdings BV (NCH), a 50 per cent affiliate of Large Africa, has completed the acquisition of the second tranche of 15 per cent in Unicem, making the company a wholly-owned subsidiary of NCH. NCH had in March 2015 acquired the first tranche of 15 per cent stake in Unicem from Flour Mills of Nigeria.

    With this final acquisition, NCH now owns 100 per cent of Unicem and consequently Lafarge Africa now owns 50 per cent of the equity of Unicem. The completion of this transaction removes any representation or equity interest of Flour Mills on the board of Unicem, according to the initial terms of agreement.

    Highly leveraged and facing challenges in the fragmented and highly competitive foods industry, Flour Mills of Nigeria is streamlining its operations and raising new capital to reposition its operations against headwinds created by Nigeria’s foreign exchange crisis and poor infrastructure. Flour Mills has also started the process to raise additional equity capital of N30.5 billion from its shareholders.

    The management of Unicem will continue to be shared between Lafarge and Holcim, technically implying that the cement company is under the same global management with the merger of Lafarge and Holcim to form LafargeHolcim.

    Lafarge Africa plans to use Unicem to further deepen its geographical strength in the South-South axis. Unicem’s operational office is located in Calabar and its manufacturing plant is in Mfamosing, Cross Rivers State. It currently has a cement production capacity of 2.5 million metric tonnes per annum (Mtpa) and it is developing a second production line of 2.5Mtpa. The second production line is targeted to be commissioned in 2016 to bring Unicem’s total production capacity to 5.0Mtpa.

    The board of Lafarge Africa had in November 2014 approved initial agreement by NCH B.V., to buy out minority stake in Unicem and make the Calabar-based cement company a wholly-owned subsidiary of NCH. The initial agreement indicated that NCH was expected to fully consummate the acquisition on or before February 2016. NCH had earlier in the month entered into an agreement with Flour Mills of Nigeria (FMN), defining a roadmap to purchase Flour Mills of Nigeria’s 30 per cent investment in Unicem.

    The board of Lafarge Africa had rationalized the acquisition as part of the cement group’s continued investment in Nigeria to accelerate the growth and development of its business, with a focus on serving its customers and delivering value through provision of innovative products and services with a strong geographical spread.

    The acquisition, which comprised sale of shares and the transfer of loans, was then structured in two approximately equal tranches – with first tranche payable during first quarter of 2015 and the second tranche due no later than February 29, 2016.

    The transaction was priced within a range of between N47 and N55 billion, depending primarily on the effective dates of payment and prevailing dollar-Naira exchange rate at the time of payment. Transaction advisers had said the valuation for Unicem was consistent with its fair market value and was in line with the previous valuation of Unicem in the previous transfer to Lafarge Africa.

    Lafarge had in July 2014 consolidated its cement businesses in Nigeria and South African to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc, which was subsequently rebranded as Lafarge Africa.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent; Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

    The new group managing director, Lafarge Africa, Mr. Peter Hoddinott, who resumed in July 2015, wears two caps as group managing director of Lafarge Africa and area manager for the LafargeHolcim business in the West African region. His main mandate included acceleration of the global cement group’s expansion plan in Nigeria and the West African region.

    Hoddinott’s appointment was said to be in furtherance of Lafarge’s long-term agenda for Nigeria as the focal point of its business within the region and the continent. The new group managing director is expected to deepen the existing businesses of the Lafarge Africa, introduce new businesses and drive the group’s capital investments.

    After it successfully combined its operations in South Africa and Nigeria to create Lafarge Africa, Lafarge had revealed plan to double its production capacity in Nigeria as part of a new expansion programme that would see additional investments by the foreign majority shareholders in its Nigerian subsidiaries.

     

     

     

     

  • Lafarge Africa wins Best in HSE Practice award

    Lafarge Africa Plc has won the Best Health, Safety and Environment (HSE) Practice award in the Manufacturing sector at the Nigeria Safety Award for Excellence Hall of Fame 2015.

    Also known as 9Ja Safe Awards, the event, held at the Oriental Hotel, Lagos.

    According to the organisers of the awards, Lafarge Africa made an exceptional and outstanding contribution in HSE towards national development, achieved ground-breaking innovations in HSE and also made outstanding contribution to its environment.

    Managing Director, Concrete & Aggregates Readymix (an arm of Lafarge) Mr. Loren Zanin received the award for Mr. Peter Hoddinott, the Group Managing Director/Chief Executive Officer of Lafarge Africa.

    Others with him were Mr. Tim Oseghe, Country Road Safety Manager; Salisu Sayaya, Lagos Liaison Manager, Ashaka Cement Operations and Engineering Tukur Lawal, Country Health & Safety Manager. Lawal was a nominee in the Health and Safety Champions category.

    Receiving the award, Zanin praised the organisers of the awards for raising the standard of health and safety through the initiative.

    He said: “We are very thrilled to be part of the evening. We are not doing health and safety because of awards, but we strongly believe in health and safety that is why we look after our workers and we ensure that families of our workers have safe working places. Awards are nice but what is more important to us is being a good health and safety provider always. Every organisation has got the responsibility to look after its workers and we are doing what we know is morally right.

    “With this award, the management board of Lafarge Africa Plc. has been given recognition because we are going in the right direction when it comes to health and safety, which shows we are committed to what we are doing.

    ‘’This award, therefore, stands a big uplift to our people because we are being recognised as leader in health and safety in Nigeria. We are proud of that. We urge all Nigerians never to stop thinking about health and safety at work, on the road and at home.  Health and safety is 24 hours a day.”

  • NSE to readmit Lafarge Africa into high-priced stocks’ list

    NSE to readmit Lafarge Africa into high-priced stocks’ list

    The Nigerian Stock Exchange (NSE) will readmit Lafarge Africa Plc into the top-ranking “high-priced stocks” list following the steady appreciation in the share price of the cement company.

    Lafarge Africa’s share price recently regained the decisive N100 price per share. It rose by 1.0 per cent to N101 on Monday.

    An official of the NSE said the Exchange is monitoring the share price of the cement company and will readmit the company into the exclusive list once it sustains the price benchmark within the required timeline.

    The NSE had in March 2015 downgraded Lafarge Africa from the top-ranking “high-priced stocks” list following the depreciation of share price of the cement company. It had added Lafarge Africa to the list in April 2014.

    The “high-priced stocks”, according to the NSE categorisation, are stocks with share prices of N100 and above and regular and pre-determined level of activities. In 2012, the NSE had alongside the introduction of market making introduced a pilot programme under which stockbrokers could move prices of “high priced stocks” with 10,000 shares as against the general operating rule of 50,000 shares for the movement of share prices of other stocks.

    In downgrading the stock, the NSE had noted that Lafarge Africa had traded below N100 for the past four months within the past six months’ timeframe.

    There are now 12 stocks categorised as “high-priced stocks”. These included Dangote Cement Plc, Guinness Nigeria Plc, Mobil Nigeria Plc, Nestle Nigeria Plc, Nigerian Breweries Plc, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF), Total Nigeria Plc, Seplat Petroleum Development Company Plc, Forte Oil Plc and Seven-Up Bottling Company Plc.

    While setting out the criteria for the “high-priced stocks”, head, market surveillance, Nigerian Stock Exchange (NSE), Mr. Abimbola Babalola had outlined that the benchmark price of N100 and liquidity are the two considerations for inclusion within the category.

    Lafarge Africa recently distributed N15.86 billion as cash dividend to shareholders, representing a dividend per share of N3.60, 9.1 per cent above N3.30 distributed for the 2013 business year. The dividend recommendation showed continuous growth in the company’s payout as it had distributed dividend per share of N3.30 and N1.20 for 2013 and 2012 respectively.

    Key extracts of the audited report and accounts for the year ended December 31, 2014 with an operational profit after tax of N37 billion, eight per cent higher than prior year, after adjusting for one-offs.  Cash of N49 billion was generated from the operations. Consolidated revenues were flat at N206 billion when compared to 2013. The Nigerian operations showed a growth of eight per cent cushioning the short-term market challenges in South Africa. Earnings before interest, taxes, depreciation and amortisation (EBITDA) was relatively stable at N55.3 billion in 2014 compared to N55.7 billion in 2013, with Nigeria growing by 16 per cent. For the first quarter ended March 31, 2015, Lafarge reported a revenue of N57 billion in the first quarter, 15 per cent higher than comparable period of 2014. Profit after tax was N8.6 billion and N14.6 billion of cash was generated from operations.

  • Lafarge Africa promises better future as shareholders get N16b dividend

    •Osunkeye retires, Balogun becomes chairman 

    It was a bright weekend for shareholders of Lafarge Africa Plc as the company showcased the early benefits of its consolidation and distributed about N16 billion as cash dividends to shareholders.

    The annual general meeting at the weekend in Lagos also witnessed the retirement of the iconic chairman of the board, Chief Olusegun Osunkeye and the assumption of office by leading investment banker, Mr. Mobolaji Balogun.

    Addressing the shareholders, Osunkeye said the consolidation of the Lafarge businesses into Lafarge Africa has transformed the company into a group which is well equipped to continue its acceleration notwithstanding challenges in the market place.

    He outlined that with the consolidation, Lafarge Africa’s cement production capacity has grown from 4.5 million tonnes to about 12 million tonnes while 3.5 million cubic meters of ReadyMix concretes and over 5.0 million tons of Aggregates have been added to the portfolio.

    He noted that the company has doubled its turnover from N100 billion to N200 billion while the earnings before interest, tax depreciation and amortization (EBITDA) has grown from N36 billion to N55 billion. He added that N99 billion of cash was generated from operations in 2014.

    “All of this is building on the foundation which was laid over the last few years, and the transformation into Lafarge Africa Plc is a natural progression to take our company to the next level,” Osunkeye said.

    He assured that while the company’s Nigerian businesses have shown strong growths, the medium to long term outlook remains positive for the company’s South African business noting that the recent strengthening of Rand against Naira will increase the value of the South African profits to the group.

    Osunkeye, who received standing ovation from the shareholders, said he was leaving Lafarge Africa in a capable hand that could take it into the next level.

    “Balogun is a seasoned and committed director with breadth of experience across finance, strategy and management. He is very familiar with Lafarge’s business in Nigeria and Africa and I am sure he is the right person to chair the Board going forward,” Osunkeye said.

    He expressed his gratitude to all stakeholders and urged them to extend the same level of support to his successor, noting that it was a privilege and honour to have served on the board of the company for 14 years and as chairman for five years from October 2009.

    Shareholders approved the distribution of N15.86 billion dividend, representing a dividend per share of N3.60, 9.1 per cent above N3.30 distributed for the 2013 business year.

    In his remarks, group managing director, Lafarge Africa Plc,  Mr. Guillaume Roux  said the good performance of the company was due to management’s commitment to corporate governance, innovation, customer service and cost efficiency.

    He assured shareholders that the company would continue to enhance their investment’ value by creating better returns in the years ahead.

     

  • Lafarge Africa leads building materials sector

    Lafarge Africa leads building materials sector

    • Shareholders to get N16.4b dividends  

    Shareholders of Lafarge Africa Plc are in for wider dining tables as they meet this week to consider the annual report and accounts of the cement company, including a recommendation for distribution of N16.4 billion as cash dividends to shareholders. Shareholders will not only receive immediate cash, they are the biggest gainers so far this year in the building materials sector.

    Year-to-date analysis of share price movements in the building materials sector showed that Lafarge Africa opens today with the highest capital gain in its sector. Lafarge Africa’s year-to-date gain of 21.99 per cent is not only the highest gain in the building materials sector but it is substantially above the overall market performance and average returns by all other key sectors at the stock market. The All Share Index (ASI), the main benchmark index that tracks prices of all quoted equities, opens with a negative return of -0.63 per cent. The NSE Industrial Goods Index, which serves as benchmark index for the building materials sector, carries a modest return of 3.63 per cent. Nearly all the other cement stocks currently have negative return. Dangote Cement opens today with average year-to-date return of -10.75 per cent, Ashaka Cement carries -6.53 per cent while Cement Company of Northern Nigeria has a modest gain of 1.06 per cent. Four other building materials stocks-African Paints, First Aluminium Nigeria, Premier Paints and IPWA have been stagnant while DN Meyer, Paints and Coatings Manufacturing  and Portland Paints and Products Nigeria are negative at -4.60 per cent, -17.53 per cent and -6.67 per cent. CAP and Berger Paints are the other two best-performing stocks with 14.67 per cent and 11.11 per cent.

     

    Double returns

    The board of directors of Lafarge Africa has recommended payment of a dividend per share of N3.60 to shareholders as returns for the 2014 business year. The dividend recommendation showed continuous growth in the company’s payout as it had distributed dividend per share of N3.30 and N1.20 for 2013 and 2012 respectively. The current dividend recommendation is expected to be approved at the company’s annual general meeting on May 22 and it will thereafter become payable on May 25, 2015. However, only shareholders on the book of the company as at April 27, 2015 would be entitled to the dividend payout.

    Key extracts of the audited report and accounts for the year ended December 31, 2014 with an operational profit after tax of N37 billion, eight per cent higher than prior year, after adjusting for one-offs.  Cash of N49 billion was generated from the operations. Consolidated revenues were flat at N206 billion when compared to 2013. The operations showed a growth of eight per cent cushioning the short-term market challenges in South Africa. Earnings before interest, taxes, depreciation and amortisation (EBITDA) was relatively stable at N55.3 billion in 2014 compared to N55.7 billion in 2013, with Nigeria growing by 16 per cent. For the first quarter ended March 31, 2015, Lafarge reported a revenue of N57 billion in the first quarter, 15 per cent higher than comparable period of 2014. Profit after tax was N8.6 billion and N14.6 billion of cash was generated from operations.

    Chairman, Lafarge Africa Plc, Chief Olusegun Osunkeye, described the company’s performance as a good one noting that even in a volatile market, the company has affirmed its strength and commitment to achieving excellence.

    Group Managing Director, Lafarge Africa Plc, Mr. Guillaume Roux, said the group’s business combination plans have been well executed within set timelines.

    “We are committed to improving operational performance by leveraging on opportunities this presents to us to deliver sustainable returns to our shareholders,” Roux said.

    On its outlook, the company stated that it expected cement demand to increase both in Nigeria and South Africa in 2015.

    “In Nigeria, the demand growth should be supported by increasing needs for housing and infrastructures, but could be lower than normal growth levels given the exchange rate development. This should be partly cushioned through the South African cash flow. We remain very optimistic and highly committed to delivering innovative building materials while leveraging on the operational strength and pedigree of the Lafarge Group,” Lafarge stated.

     

    Larger capacity

    The creation of Lafarge Africa has transformed the company into a group which is well equipped to continue its growth notwithstanding challenges in the market place. The company’s current production capacity has grown from 4.5 million tons to about 12 million tons. In addition, 3.5 million cubic meters of ReadyMix concrete and over 5.0 million tons of aggregates have been added to the portfolio. The latest performance underlined the success of the consolidation of the company’s businesses. Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria (Unicem) Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

    Nigerian Cement Holdings B.V.(NCH), an affiliate of Large Africa Plc, has also completed the acquisition of the first 15 per cent tranche equity stake in Unicem.  NCH, which is owned 50 per cent by Lafarge Africa, had 70 per cent equity stake in Unicem and with the acquisition, it has now increased its stake to 85 per cent. NCH had in November 2014 entered into an agreement with FMN Cement Industries Limited, a wholly owned subsidiary of Flour Mills of Nigeria Plc to acquire its 30 per cent investment in Unicem. The completion of the acquisition of the first tranche of 15 per cent paves the way for the acquisition of the second tranche of 15 per cent, which is scheduled for on or before February 2016.

    Lafarge Africa also recently increased its majority equity stake in Ashaka Cement to 82.46 per cent. This followed the completion of the mandatory tender offer (MTO ). Following the consolidation of Lafarge’s businesses in Nigeria and South Africa into Lafarge Africa, Lafarge Africa had acquired 58.61 per cent majority equity stake in Ashaka Cement. The majority equity stake was previously held by Lafarge Nigeria (UK) Limited. Lafarge Africa then in late December 2014 launched an MTO to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses.

    Lafarge S.A. of France now controls 72.74 per cent of Lafarge Africa, the remaining 27.26 per cent is held by Nigerian and foreign, institutional and individual investors. Lafarge S.A. of France is a world leader in building materials with a presence in 62 countries across the Globe. Consequently, Lafarge Africa is able to take advantage of and benefit from Lafarge S.A.’s management and technical expertise.

    “Our company has delivered a good performance in spite of the general elections and market uncertainty. We remain highly committed to delivering a strong result in 2015 in line with our ultimate objective of improving value to our shareholders,” Osunkeye said on the outlook of the company.

    “We have achieved stability in our operations, marked by our solid performance. The consolidation of our businesses and expansion projects presents an excellent foundation for future growth. Our management team is fully mobilized to deliver operational excellence whilst also leveraging on the strength of the Lafarge Group,” Roux said.

     

    New Leadership

    Meanwhile, Osunkeye will retire voluntarily as chairman after the annual general meeting, having served as a director for 14 years, five out of which was as chairman. He will be succeeded by Mr. Mobolaji  Balogun, who assumes office on May 23.

    “I am delighted that the board has appointed Balogun to succeed me as chairman. He has a breadth of experience across finance, strategy and management and is very familiar with Lafarge’s business in Nigeria and Africa and I am sure he is the right person to chair the board going forward, after the 2015 AGM,” Osunkeye said.

    Balogun noted that Lafarge Africa occupies a unique position and he is taking over at an exciting time. “I also look forward to working with Roux and the entire board as we move the company forward,” Balogun assured.

     

  • Lafarge Africa may delist Ashakacem

    Lafarge Africa may delist Ashakacem

    Lafarge Africa Plc may opt for voluntary delisting of its subsidiary, Ashaka Cement (Ashakacem) Plc, as the cement group seeks to optimise synergies and efficiency from the ongoing consolidation of its businesses. Lafarge Africa and Ashaka Cement are listed on the Nigerian Stock Exchange (NSE).

    Lafarge Africa is the ninth most capitalised stock while Ashakacem ranks 35th on the capitalisation table.

    Sources told The Nation that Ashakacem may be delisted soon citing technical and cost challenges that make continuing listing of the cement company unviable.

    Lafarge Africa last weekend announced that it had acquired additional 23.85 per cent equity stake from minority shareholders of Ashakacem to push its majority equity stake from 58.6 per cent to 82.46 per cent.

    This technically places Ashakacem below the minimum 20 per cent free float required for continuing listing on the main board of the NSE.

    Listing requirements at the NSE stipulates that companies on the main board must maintain 20 per cent free float while companies on the Alternative Securities Market (ASeM) are required to maintain free float of 15 per cent.

    A management source at Lafarge Africa said the management of the cement group was aware of the free float deficiency and currently considering all options on the propriety of continuing listing of Ashakacem or otherwise.

    “Lafarge is aware of the Stock Exchange Listing rule regarding minimum float of 20 per cent. We are currently in the process of giving a consideration to the continual listing of Ashakacem on the Stock Exchange, but no decision has yet been made. The market will be duly informed as soon as this is finalised,” the source stated.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    The NSE, like other Exchanges, uses free float to ensure that there is an orderly and liquid market in the securities of quoted companies as well as prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation.

    With the 82.46 per cent majority stake of Lafarge Africa reducing Ashakacem’s free float to 17.54 per cent and other concentrated shareholdings, there are indications that Ashakacem’s free float deficiency may be higher.

    A source said the free float deficiency has put Ashakacem in a voluntary delisting mode and it is a matter of procedure before the delisting will be finalised.

    While the rules of the Exchange granted the management of the market discretion to grant waivers for companies with free float deficiency, such waivers are temporary and are based on viable compliance plans that show the core investors are willing to redress the deficiency by selling down their major stakes or dilute such to free the minimum 20 per cent for unrelated retail minority shareholders. The rules do not allow perpetual waiver.

    Market sources cited many examples that had sought voluntary delisting due to free float deficiency including Ecobank Nigeria Plc and Oasis Insurance Plc. In a similar circumstance to Lafarge Africa-Ashakacem situation, Ecobank Transnational Incorporated (ETI) Plc had opted for voluntary delisting of its listed subsidiary-Ecobank Nigeria, following a business combination that reduced Ecobank Nigeria’s free float.

    Following the acquisition of Oceanic Bank International Plc by ETI, the parent company of Ecobank Nigeria, Ecobank Nigeria and Oceanic Bank had agreed to merge their businesses and subsume under the Ecobank Nigeria brand. However, as a consequence of the merger, ETI’s shareholding in the enlarged Ecobank Nigeria increased from 85 per cent to approximately 93 per cent, further reducing Ecobank Nigeria’s minimum free float to maintain listing on the NSE. ETI maintains its listing and voluntarily delisted Ecobank Nigeria.

    Sources also said Lafarge Africa may be attracted by the opportunity to further reduce its costs. Lafarge had on July 9, last year received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria (Unicem) Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

    Nigerian Cement Holdings B.V.(NCH), an affiliate of Large Africa Plc, two weeks ago completed the acquisition of the first 15 per cent tranche equity stake in Unicem  NCH, which is owned 50 per cent by Lafarge Africa, had 70 per cent equity stake in Unicem and with the acquisition, it has now increased its stake to 85 per cent.

    NCH had in November 2014 entered into an agreement with FMN Cement Industries Limited, a wholly owned subsidiary of Flour Mills of Nigeria Plc to acquire its 30 per cent investment in Unicem. The completion of the acquisition of the first tranche of 15 per cent paves the way for the acquisition of the second tranche of 15 per cent, which is scheduled for on or before February 2016.

    Lafarge Africa then in late December, last year launched a Mandatory Tender Offer (MTO) to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses. The MTO was triggered by the transfer of 58.61 per cent majority equity stake in Ashaka Cement previously held by Lafarge Nigeria (UK) Limited. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Under the MTO, Lafarge Africa offered 57 ordinary shares of 50 kobo each in exchange for 202 ordinary shares of 50 kobo each of Ashakacem. In addition, Lafarge Africa offered to pay N2 for every acquired Ashakacem’s share.

    At the end of the MTO, 3,641 shareholders of Ashakacem tendered 534.14 million ordinary shares of 50 kobo each, which represented 23.85 per cent of the total minority stake of 41.39 per cent sought to be acquired by Lafarge Africa.

    The board of Lafarge Africa last week confirmed that it has allotted about 150.73 million ordinary shares of 50 kobo each of Lafarge Africa and paid about N1.07 billion as shares and cash considerations to the shareholders of Ashakacem that accepted the MTO.

    Chairman, Lafarge Africa Plc, Chief Olusegun Osunkeye, described the completion of the MTO as a major step in the consolidation of the Lafarge’s businesses.

    “This is a significant step in the conclusion of the consolidation process of Lafarge Africa Plc. I would like to express my appreciation to the AshakaCem shareholders whose participation in the transaction through the tender of their shares has made this a very successful process,’’ Osunkeye said Regulatory filing indicated that by the close of the takeover bid on 31 July 2014, FBN Insurance Limited received a total of 1,289,493,953 ordinary shares bringing its shareholding in Oasis Insurance to approximately 91.1 per cent. FBN Insurance Limited elected to exercise its rights under Section 146(2) of the Investments and Securities Act to compulsorily acquire shares belonging to the minority shareholders having crossed the 90 per cent threshold. At the end of the 20-day statutory notice period FBN Insurance Limited increased its holdings by an additional 22,603,617 shares bringing its holdings in Oasis Insurance Plc to approximately 91.4 per cent.

    FBN Insurance Limited thereafter transferred the sum of N310,649,730 to FBN Registrars as consideration for the outstanding 560,808,895 shares or 8.6% per cent. FBN Registrars will keep the fund in trust for shareholders who are yet to tender their share certificates. By this action, FBN Insurance Limited now holds 100 per cent equity interest in Oasis Insurance Plc.

    The NSE yesterday confirmed the transaction, noting that Oasis Insurance requested for voluntary delisting after the full acquisition.

     

     

     

  • Lafarge Africa acquires Ashakacem’s 23.9% shares

    Lafarge Africa Plc achieved 57.6 per cent success in its bid to acquire the entire minority stake in Ashaka Cement (Ashakacem) Plc. The concluding report of the mandatory tender offer (MTO) launched by Lafarge Africa for the Ashakacem’s minority shareholdings was released at the weekend.

    According to the report, 3,641 shareholders of Ashakacem tendered 534.14 million ordinary shares of 50 kobo each, which represented 23.85 per cent of the total minority stake of 41.39 per cent sought to be acquired by Lafarge Africa.

    The board of Lafarge Africa confirmed that it has allotted about 150.73 million ordinary shares of 50 kobo each of Lafarge Africa and paid about N1.07 billion as shares and cash considerations to the shareholders of Ashakacem that accepted the MTO.

    With this, Lafarge Africa now has 82.46 per cent majority equity stake in Ashakacem. The completion of the MTO followed receipt of the requisite regulatory approvals by Lafarge Africa.

    Following the consolidation of Lafarge’s businesses in Nigeria and South Africa into Lafarge Africa, Lafarge Africa had acquired 58.61 per cent majority equity stake in Ashaka Cement. The majority equity stake was previously held by Lafarge Nigeria (UK) Limited. The acquisition was done through a block trade at the Nigerian Stock Exchange (NSE).

    Lafarge Africa then in late December 2014 launched an MTO to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses. The MTO, scheduled to close in January 23, 2015, was extended for another five working days.

    Under the MTO, Lafarge Africa offered 57 ordinary shares of 50 kobo each in exchange for 202 ordinary shares of 50 kobo each of Ashakacem. In addition, Lafarge Africa offered to pay N2 for every acquired Ashakacem’s share.

    Minority shareholders had held 927.009 million ordinary shares of 50 kobo each in Ashakacem, representing 41.39 per cent of the cement company’s total outstanding shares. With this, Lafarge was expected to issue 261.58 million ordinary shares and pay additional cash consideration of N1.85 billion as equity and cash consideration for the full take-over of the 41.39 per cent equity stake held by minority shareholders in Ashakacem.

    Chairman, Lafarge Africa Plc, Chief Olusegun Osunkeye, described the completion of the MTO as a major step in the consolidation of the Lafarge’s businesses.

    “This is a significant step in the conclusion of the consolidation process of Lafarge Africa Plc. I would like to express my appreciation to the AshakaCem shareholders whose participation in the transaction through the tender of their shares has made this a very successful process,’’ Osunkeye said.

    Group managing director, Lafarge Africa Plc, Mr. Guillaume Roux said the enlarged Lafarge group would continue to work to maximize shareholders’ value.

    “We are delighted to have received a great response from AshakaCem Plc shareholders and will continue to work towards maximizing shareholder value,” Roux said.

    The MTO was triggered by the transfer of 58.61 per cent majority equity stake in Ashaka Cement previously held by Lafarge Nigeria (UK) Limited. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria (Unicem) Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

    Nigerian Cement Holdings B.V.(NCH), an affiliate of Large Africa Plc, two weeks ago completed the acquisition of the first 15 per cent tranche equity stake in Unicem  NCH, which is owned 50 per cent by Lafarge Africa, had 70 per cent equity stake in Unicem and with the acquisition, it has now increased its stake to 85 per cent.

    NCH had in November 2014 entered into an agreement with FMN Cement Industries Limited, a wholly owned subsidiary of Flour Mills of Nigeria Plc to acquire its 30 per cent investment in Unicem. The completion of the acquisition of the first tranche of 15 per cent paves the way for the acquisition of  the second tranche of 15 per cent, which is scheduled for on or before February 2016.

    Meanwhile, the board of Lafarge Africa at the weekend also announced that it has appointed leading investment banker, Mr. Mobolaji Balogun, as the successor to retiring chairman, Chief Olusegun Osunkeye.

    Osunkeye, who had earlier retired from Nestle Nigeria as he winds down long industrious boardroom career, opted for voluntary retirement from the board of Lafarge Africa after leading the cement group through a complex consolidation of its operations.

    Osunkeye’s retirement takes effect on May 23, 2015, the same day that Mobolaji Balogun, son of the founder of FCMB Group, Chief Subomi Balogun, steps into the board chairmanship. Balogun has been a non-executive director on the board of Lafarge Africa.

    Also, in apparent appointments made to reflect the completion of the MTO for Ashakacem, the board has also appointed Alhaji Shamsuddeen Usman, Mrs. Elenda Osima-Dokubo, Mrs. Adenike Ogunlesi and Alhaji Umaru Kwairanga as non-executive directors. Kwairanga was the former chairman of Ashakacem. The four appointments took effect last Wednesday.

  • NSE downgrades Lafarge Africa from high-priced stocks’ list

    The Nigerian Stock Exchange (NSE) at the weekend downgraded Lafarge Africa Plc from the top-ranking “high-priced stocks” list following the depreciation of share price of the cement company.

    The NSE had in April last year included Lafarge Africa stocks as one of the specially designated high-priced stock.

    The “high-priced stocks”, according to the NSE categorisation, are stocks with share prices of N100 and above and regular and pre-determined level of activities. In 2012, the NSE had alongside the introduction of market making, introduced a pilot programme under which stockbrokers could move prices of “high priced stocks” with 10,000 shares as against the general operating rule of 50,000 shares for the movement of share prices of other stocks.

    “Lafarge Africa has traded below N100 for the past four months within the past six months’ timeframe.  Therefore, we have removed Lafarge Africa from the list of 10,000 units market-trade price movement equities,” NSE stated.

    The Nation had reported exclusively that NSE might review the inclusion of Lafarge Africa with the leading stocks’ group.

    With the removal of Lafarge Africa, there are now 12 stocks categorised as “high-priced stocks”. These included Dangote Cement Plc; Guinness Nigeria Plc; Mobil Nigeria Plc; Nestle Nigeria Plc; Nigerian Breweries Plc; SIM Capital Fund; Skye Shelter Fund; Nigerian Energy Sector Fund (NESF); Total Nigeria Plc; Seplat Petroleum Development Company Plc; Forte Oil Plc and Seven-Up Bottling Company Plc.

    While setting out the criteria for the “high-priced stocks”, head, market surveillance, Nigerian Stock Exchange (NSE), Mr. Abimbola Babalola had outlined that the benchmark price of N100 and liquidity are the two considerations for inclusion within the category.

    Quoting a source in the know of the review process for the “high-priced stocks”, The Nation had reported that the Exchange would not hesitate to remove any stock that falls short of the criteria for the group.

    According to the source, the Exchange will want to maintain the integrity of the ranking process for the “high-priced stocks” as the privilege of low-volume price movement is directly attached to meeting the criteria.

    Lafarge Africa had traded at a high of N136.73 per share, but it has failed to sustain the momentum. It opened today at N89 per share.

    A source at the Exchange described the review of stocks within the high-priced category as a continuous exercise, noting that Lafarge Africa will be readmitted to the group if its share price and liquidity meet the criteria.

    The board of Lafarge Africa is expected to meet this Wednesday to review the company’s earnings and consider the probable dividends that could be paid to shareholders. There is a strong expectation that impressive dividend payout will trigger a bullish run for the stock.

    Meanwhile, Nigerian Cement Holdings B.V.(NCH), an affiliate of Large Africa Plc, has completed the acquisition of the first 15 per cent tranche equity stake in United Cement Company of Nigeria Limited (Unicem). NCH, which is owned 50 per cent by Lafarge Africa, had 70 per cent equity stake in Unicem and with this acquisition, it has now increased its stake to 85 per cent.

    NCH had in November last year entered into an agreement with FMN Cement Industries Limited, a wholly owned subsidiary of Flour Mills of Nigeria Plc to acquire its 30 per cent investment in Unicem.

    The completion of the acquisition of the first tranche of 15 per cent paves the way for the acquisition of  the second tranche of 15 per cent, which is scheduled for on or before February 2016.

     

     

  • NSE may downgrade Lafarge Africa from high-priced stocks’ list

    NSE may downgrade Lafarge Africa from high-priced stocks’ list

    The Nigerian Stock Exchange (NSE) may review the inclusion of Lafarge Africa Plc within the top-ranking “high-priced stocks” list following the steep depreciation of share price of the cement company.

    The NSE had in April included Lafarge Africa as one of the specially designated stocks known as high-priced stock.

    The “high-priced stocks”, according to the NSE categorization, are stocks with share prices of N100 and above and regular and pre-determined level of activities. In 2012, the NSE had alongside the introduction of market making introduced a pilot programme under which stockbrokers could move prices of “high priced stocks” with 10,000 shares as against the general operating rule of 50,000 shares for the movement of share prices of other stocks.

    There are 13 stocks categorised as “high-priced stocks” including Dangote Cement Plc, Guinness Plc, Mobil Plc, Nestle Plc, Nigerian Breweries Plc, SIM Capital Fund, Skye Shelter Fund, Nigerian Energy Sector Fund (NESF), Total Nigeria Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc, Forte Oil Plc, Seven-Up Bottling Company and Lafarge Africa.

    While setting out the criteria for the “high-priced stocks”, head, market surveillance, Nigerian Stock Exchange (NSE), Mr. Abimbola Babalola had outlined that the benchmark price of N100 and liquidity are the two considerations for inclusion within the category.

    Lafarge Africa has since fallen below the N100 benchmark price, the only stock below the benchmark price among the “high-priced stocks”. It opened yesterday at N72 per share. Lafarge Africa is the worst-performing cement stock so far this year with a year-to-date price depreciation of 37.39 per cent at the opening of the market yesterday. Dangote Cement, which opened yesterday at N160, carried average year-to-date return of -26.94 per cent while Cement Company of Northern Nigeria (CCNN) placed third with -21.11 per cent. Ashaka Cement, which is a target of mandatory tender offer (MTO) by Lafarge Africa, is the only cement stock with positive return with 17.20 per cent.

    A source in the know of the review process for the “high-priced stocks” said the Exchange would not hesitate to remove any stock that falls short of the criteria for the group.

    According to the source, the Exchange will want to maintain the integrity of the ranking process for the “high-priced stocks” as the privilege of low-volume price movement is directly attached to meeting the criteria.

    Lafarge Africa had traded at a high of N136.73 per share, but it has failed to sustain the momentum as it grappled with shadow struggles for market control.

    Lafarge Africa is currently offering 261.58 million ordinary shares and N1.85 billion as equity and cash consideration for the take-over of the 41.39 per cent equity stake held by minority shareholders in Ashaka Cement Plc.

    Following the consolidation of Lafarge’s businesses in Nigeria and South Africa into Lafarge Africa, Lafarge Africa had acquired 58.61 per cent majority equity stake in Ashaka Cement. The majority equity stake was previously held by Lafarge Nigeria (UK) Limited. The acquisition was done through a block trade at the Nigerian Stock Exchange (NSE).

    Now, Lafarge Africa is seeking to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses.

    A tender document showed that Lafarge Africa would be offering 57 ordinary shares of 50 kobo each in exchange for 202 ordinary shares of 50 kobo each of Ashakacem. In addition, Lafarge Africa will pay N2 for every acquired Ashakacem’s share.

    Minority shareholders hold 927.009 million ordinary shares of 50 kobo each in Ashakacem, representing 41.39 per cent of the cement company’s total outstanding shares. The tender offer is expected to close by 5pm on Friday January 16, 2015.

    The decline in Lafarge Africa has also overshadowed the valuation. Ashakacem’s share price has been stable at N24.60 per share with a market capitalisation of N55.09 billion. Lafarge Africa dropped by 98 kobo to N72 per share with a market value of N216.12 billion.

    The MTO was triggered by the transfer of 58.61 per cent majority equity stake in Ashaka Cement previously held by Lafarge Nigeria (UK) Limited. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

     

  • Lafarge Africa approves N55b acquisition of Unicem

    Lafarge Africa approves N55b acquisition of Unicem

    The board of Lafarge Africa Plc has approved initial agreement by its affiliate, Nigerian Cement Holdings (NCH) B.V., to buy out minority stake in United Cement Company of Nigeria (Unicem) Limited and make the Calabar-based cement company a wholly-owned subsidiary of NCH.

    Regulatory filing obtained yesterday by The Nation showed that NCH, a 50 per cent affiliate of Lafarge Africa Plc, is expected to fully consummate the acquisition on or before February 2016. NCH had earlier this month entered into an agreement with Flour Mills of Nigeria (FMN), defining a roadmap to purchase Flour Mills of Nigeria’s 30 per cent investment in Unicem.

    NCH currently has 70 per cent equity stake in Unicem. Upon completion of the transaction, NCH will have a 100 per cent stake in Unicem.

    According to the report, the acquisition, which comprises sale of shares and the transfer of loans, is structured in two approximately equal tranches – with first tranche payable during first quarter of 2015 and the second tranche due no later than February 29, 2016.

    The transaction is priced within a range of between N47 and N55 billion, depending primarily on the effective dates of payment and prevailing dollar-Naira exchange rate at the time of payment. Transaction advisers have said the valuation for Unicem was consistent with its fair market value and was in line with the previous valuation of Unicem in the previous transfer to Lafarge Africa.

    The report indicated that Lafarge Africa plans to use Unicem to further deepen its geographical strength in the South-South axis.

    According to the report, the acquisition is in line with Lafarge Africa Plc’s continued investment in Nigeria to accelerate the growth and development of its business, with a focus on serving its customers and delivering value through provision of innovative products and services with a strong geographical spread.

    Meanwhile, the management of Unicem will continue to be shared between Lafarge and Holcim while Flour Mills will retain its representation on the board of directors until the second tranche of the transaction is consummated.

    Lafarge had on July 9, 2014 received overwhelming shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc.

     

     

    The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc, which was subsequently rebranded as Lafarge Africa.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent; Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.