The Nation Newspaper

Tag: Shareholders

  • PCMN’s shareholders vote on relapse to private status, delisting

    Shareholders of Paints and Coatings Manufacturers Nigeria (PCMN) Plc are scheduled to meet tomorrow to vote on sub-joined resolutions that will see the relapse of the company to a private limited liability company and the delisting of its shares from the Nigerian Stock Exchange (NSE).

    A Federal High Court had directed the company to convene a court-ordered meeting on February 15, 2018 in Lagos during which shareholders will deliberate and vote on the scheme of arrangement for the change in the status of the company and the delisting from the NSE. A new company-Paintcom Investment Nigeria Limited is proposed to emerge after the delisting.

    Authorities at the NSE have confirmed that the company had submitted application for scheme of arrangement between the company and holders of its fully paid up ordinary shares in furtherance of the delisting.

    The Asset Management Corporation of Nigeria (AMCON) recently sold the fourth largest equity stake in PCMN to Bizfeat Ventures Limited, a relatively unknown firm. AMCON, the bad-debt resolution corporation floated by the government, transferred its 7.4 per cent equity stake in PCMN to Bizfeat Ventures through a negotiated cross deal at the NSE.

    The block divestment involved transfer of a total of 58.66 million ordinary shares of 50 kobo each held by AMCON to Bizfeat Ventures at a negotiated price of N1.05 per share.

    The move by PCMN comes as leading soft drink company-Seven-Up Bottling Company, concludes the process to return to a privately owned company and delist it shares from the NSE. Avon Crowncaps had earlier delisted its shares.

    The NSE had delisted five companies in 2017 with four of them delisted under compulsory delisting due to infractions and poor corporate governance. The four companies delisted in 2017 included Beco Petroleum Products, MTECH Communications, Mass Telecommunication Innovation (MTI) and UTC.  Ashaka Cement, which merged with its parent company, Lafarge Africa, was delisted under voluntary delisting option.

    In December 2016, the Exchange had delisted six companies including Lennards (Nigeria) Plc, P.S Mandrides & Company Plc, Premier Breweries Plc, Costain (W.A) Plc, Navitus Energy Plc and Nigerian Ropes under compulsory delisting window. It had earlier in May 2016 compulsorily delisted eight companies including IPWA Plc, G.  Cappa Plc, West African Glass Industries Plc (WAGI), Investment & Allied Insurance Plc, ALUMACO Plc, Jos International Breweries Plc, Adswitch Plc and Rokanna Plc.

    The NSE operates two delisting windows-voluntary and compulsory delisting. Under voluntary delisting, quoted companies can opt to delist their shares from the Exchange due to various reasons including mergers and acquisitions, restructuring and private interests subject to fulfilment of the delisting rules and requirements.

    Under the compulsory delisting window, the NSE may opt to delist companies that have failed repeatedly to meet extant rules and best practices in line with the Exchange’s commitment to protect investors and ensure that listed companies comply with global best practices.

     

  • Africa Prudential launches personalised registrar for shareholders

    Africa Prudential Plc, Nigeria’s leading share registration and investors services company, yesterday launched its new USSD code that enables shareholders to perform several tasks on their phones.

    The USSD code- *4018#, which was unveiled in Lagos yesterday enables shareholders to perform multitude of tasks including checking their outstanding dividend, shareholding balance, confirming bank mandate right from their mobile phones from the comfort of their homes, work places or leisure.

    With the code, otherwise known as “Personal Registrar”, shareholders can also check postal and email addresses from their mobile phones.

    Managing Director, Africa Prudential Plc, Mr. Peter Ashade, said the new service is available round the clock and works on all kinds of mobile phones and networks.

    He noted that the service does not require internet data as shareholders only need to dial the code to access the service environment.

    He pointed out that the “Personal Registrar” was developed by the company in its drive to persistently pursue exceptional service experience in line with its avowed commitment to culture of excellence and persistent drive to improving investors’ confidence in the market.

    “We continuously embark on product development and process improvement to deliver exceptional customer experience to our clients across sectors of the economy, while exciting the Nigerian capital market as a whole,” Ashade said.

    Head, Business Development, Africa Prudential Plc, Mrs. Bridget Bayo-Ajayi who also addressed key capital market stakeholders at the event,  encouraged shareholders whose mobile numbers have not been duly registered on the company’s database to execute a shareholder data update form for their mobile numbers to enjoy the service.

    Representing shareholders at the event, Mrs. Bisi Bakare of Pragmatic Shareholders Association, lauded Africa Prudential for putting shareholders convenience first by launching the first-of-its-kind product in registrars business.

    It would be recalled, among others that the company was named the Best Registrar Firm in West Africa by Africa-Canada Trade Alliance at the 7th Edition of the West Africa Innovation and Excellence Awards in 2017 in recognition of outstanding innovations and advocacy role in the capital market.

     

  • Shareholders hail nullification of FRCN’s rule on audit committee’s chairmanship

    Shareholders have praised a judgement of the Federal High Court that overturned a rule by the Financial Reporting Council of Nigeria (FRCN) that required any person attesting as audit committee’s chairman to be a professional member of a Nigerian accounting body.

    In 2015, the FRCN had issued and published its Rule 2(c) which required “any person attesting as chairman of audit committee to annual report statement, accounts, financial report, return, and other documents of a financial nature, shall be a professional member of an accounting body established by act of National Assembly”.

    However, public companies that could not provide a professionally qualified accountant as their audit committee chairman were required to apply for a waiver before their annual accounts can be approved. FRCN collects a fee for the issuance of the waiver.

    Shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN) had challenged the FRCN’s Rule 2(c) at the Federal High Court presided over by Justice A O Faji in Suit No FHC/L/ CS/1026/16.

    Delivering judgement, the court granted three declarations that the FRCN has no power under the Financial Reporting Council of Nigeria Act to make any rule stipulating a qualification for membership or headship of audit committees of companies incorporated under the Companies and Allied Matters Act.

    The court also held that FRCN has no power under the Financial Reporting Council of Nigeria Act to prescribe any standard of financial reporting or any other standard that requires of any company incorporated under the Companies and Allied Matters Act anything that is inconsistent with or that modifies in any respect any provision of the Companies and Allied Matters Act.

    The court declared that the FRCN is bound to exercise its functions in accordance with any law in force in the country and therefore may not prescribe any standard or make any other prescription which is inconsistent with any other law made by the National Assembly.

    With these declarations, the court ordered the setting aside of the publication purporting to be rules made by or in the name of the FRCN (copy of which is attached to the affidavit in support of this summons) or in particular rule 2(c) thereof wherein is stated that “any person attesting, as chairman of Audit committee, to annual report, financial statements, accounts, financial report, returns and other documents of a financial nature, shall be a professional member of an accounting body established by Act of National Assembly.

    The court also set aside any other directive of the FRCN to companies incorporated under the CAMA published on the website of the FRCN or by any other means on the qualification for membership, headship or composition of an audit committee.

    Justice Faji pointed out that CAMA makes no provision for qualification of chairman of the audit committee, noting that apart from section 359(4) which prescribes those who can be members of the committee, there is no other qualification.

    “In so far as the rule (Rule 2c) therefore seeks to introduce a qualification that is outside the powers of the defendant. The defendant is not a law making body and cannot by its own rules (or subsidiary legislation at best) seek or attempt to amend a law of the National Assembly. Declarations ‘1’- ‘3’therefore succeed” Justice Faji ruled.

    National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Mr. Adeniyi  Adebisi, said the ruling has vindicated the position of the shareholders and further emboldened them to play active roles in the regulation of the capital market.

    According to him, ISAN had considered the Rule 2(c) of the FRCN as an anomaly because it was against the letters and spirit of the Companies and Allied Matters Act (CAMA) section 359. The association engaged the Executive Secretary of the FRCN on a number of occasions to reverse itself regarding the said rule, but it refused to do so.

    “It is worthy of note that regulators generally have succeeded in intimidating the regulated to the extent that they are prepared to accept anything offered to them  in the guise of regulation without as much as a protest. This is because they are afraid of being victimised in one way or the other for challenging the regulators.

  • Shareholders in last-minute rush for e-dividends

    • Call for extension of deadline

    With three working days to subscribe to the free registration for electronic dividend (e-dividend) payment, shareholders are in a last-minute rush to meet the December 31 deadline.

    At the expiration of the deadline, Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), shall direct a cessation of issuance of dividend warrants and shareholders will only receive their dividends through their bank accounts.

    Also, from next January 1, investors who fail to embrace the free e-dividend exercise will pay N150 registration fee.

    A cross section of capital market stakeholders visited by The Nation at the weekend showed increased activities on the registration. At the various registration points – banks, registrars and stockbrokers, officials confirmed that there have been noticeable increase in request for e-dividend.

    SEC insisted that there was no going back on its decision to stop issuance of dividend warrant by December 31. E-dividend mandate registration was at 50,819 and 59,204 in August and September 2017, but it dropped to 37,153 last October.

    Stakeholders, who spoke with The Nation at the weekend called on SEC to extend the e-dividend registration citing hitches that had slowed down the process of registration. They noted that given the importance of the e-dividend system to the stock market, SEC should allow the e-dividend and dividend warrants to run concurrently while improving enlightenment campaign for the e-dividend.

    Shareholders United Front (SUF) National Coordinator, Mr. Gbenga Idowu, said SEC should extend the deadline for the e-dividend registration to enable retail shareholders that are having difficulties with the registration to resolve the issues.

    He urged SEC to widen its publicity campaign to other nooks and crannies of the country.

    Standard Shareholders Association of Nigeria National President, Mr. Godwin Anono, said SEC should allow open-ended registration for the e-dividend as part of its market development mandate.

    He alleged that registrars were  frustrating shareholders with unnecessary additional requirements for the e-dividend even when shareholders have provided their Biometric Verification Number (BVN).

    According to him, many registrars were stalling the e-dividend registration because they are the main beneficiaries of the  lopsided system where dividends are either delayed or categorised as unclaimed.

    Constance Shareholders Association of Nigeria National President, Mallam Shehu Mikhail, said SEC should compel the three main stakeholders in the registration process – the Central Securities Clearing System, registrars and stockbroking firms to harmonise their data base using the Know-Your-Customer (KYC) information from the stockbroking firms.

    SEC last year announced last June 30, as deadline for issuing physical dividend warrants but later extended it to December 31 to shareholders by quoted companies to tackle unclaimed dividends and mitigate the risks associated with warrants.

    In November 2015, SEC launched the E-Dividend Mandate Management System (E-DMMS)  with the Central Bank of Nigeria, Nigerian Interbank Settlement System (NIBSS) and other stakeholders. The E-DMMS is an E-dividend payment portal that ensures the payment of dividends  into a shareholder’s account.

    It is believed that these steps taken by the Commission would help to reduce the increase of unclaimed dividend which stood at N117 billion as at December 31, 2016.  Of this figure, N86 billion was in the custody of the paying companies while N13.7 billion was with the registrars. From November 2015, when the SEC kicked off the campaign on e-dividends, about N42.2 billion has been paid to investors from the backlog of unclaimed dividends.

  • Shareholders support Oando management

    Shareholders support Oando management

    Shareholders’ groups, yesterday, passed a vote of confidence on the management of Oando Plc for improving the fortunes of the company.

    The groups include Shareholders United Front Association (SUFA), the National Committee of Shareholders Association (SCSA), and others.

    The groups in a statement, pledged supports for Oando’s management, amid the investigation even as the Security and Exchange Commission (SEC) carries out investigation on the activities of the company.

    A member of the National Coordinating Committee of Shareholders Association, Mrs Oludewa Thorpe said the company has shown the ability to provide returns on  investments (RoI) to investors.

    She said: ‘’Having worked tirelessly to bring the company back from a loss position two years ago to four quarters of profitability, it is evident that the management team is interested in truly turning the company around.’’

    Another shareholder, Mr Gbenga Idowu, said he and his colleagues have confidence in the current management of Oando, having performed creditably for the shareholders.

    He said the recent attack on the management of Oando, by shareholders under the aegis of  Oando Shareholders Solidarity Group (OSSG) was baseless.

    Another shareholder, Alhaji Kabiru Tambari, said “I am a 100 per cent with Oando Plc. I have been a shareholder since 1991 when the company was Unipetrol.  “The current management team is truly trying its best and this is evidenced with the company’s return to profit after a period of losses.”

    He said the recent attack on the management of Oando, by shareholders under the aegis of  Oando Shareholders Solidarity Group(OSSG) is uncalled for.

  • Flour Mills to raise N39.9b new capital from shareholders

    Flour Mills to raise N39.9b new capital from shareholders

    Flour Mills of Nigeria Plc at the weekend submitted formal application to the Nigerian Stock Exchange (NSE), seeking to raise N39.9 billion in new equity funds from existing shareholders.

    A regulatory filing at the NSE at the weekend indicated that Flour Mills of Nigeria plans to raise N39.85 billion through a rights issue of 1.476 billion ordinary shares of 50 kobo each at N27 per share. The rights will be pre-allotted to shareholders on the basis of nine new ordinary shares of 50 kobo each for every 16 ordinary shares of 50 kobo each held as at Friday December 8, 2017.

    Chairman, Flour Mills of Nigeria (FMN) Plc, Mr. John Coumantaros, had earlier confirmed the approval of the new fund raising by the Securities and Exchange Commission (SEC).

    Shareholders had at an extraordinary general meeting in 2015 authorised the directors to raise up to N40 billion of additional equity funds through a rights issue.

    Coumantaros said the board of directors will watch the capital market condition to determine the appropriate time to launch the first tranche of the new supplementary issue. The sustained rally at the stock market might have encouraged the board of Flour Mills of Nigeria to launch the rights issue.

    Reviewing the operations and outlook of the group recently, Coumantaros noted that though the operating environment has been tough and challenging, the group can look to the future with confidence that its prospects are promising and bright while the fundamentals are strong.

    According to him, the group sees opportunities in the challenges and it is determined to explore them in the most profitable but sustainable manner.

    “FMN is determined to continue to feed the nation every day. We shall keep maintaining our wide portfolio of high quality consumer food options and step up our input of locally sourced raw materials thereby supporting the livelihood of Nigerian farmers and Nigerian businesses,” Coumantaros said.

    He added that the group would continue to invest in growing portfolio of localised products in support of the nation’s economy.

    He outlined that as the group strives to further restructure its operations, streamline business operations to focus on core businesses, constantly monitor and manage costs optimally, improve and re-engineer existing product range, the group will focus on innovation and develop new strategies for the market by making its products more visible and available at points of sale.

    “We shall also continue to improve our sales, merchandising, redistribution personnel and activities,” Coumantaros said.

    He reiterated the support of the group for the Federal Government’s backward integration policy, assuring that the group is determined to ensure that its agro-allied strategy provides sustainable returns on capital invested by maximising local content in group products.

    He noted that in furtherance of the group’s vision to be involved at all stages of food value chain- from the farm to table, raw materials are being produced locally to ensure that good quality but fair value products are developed locally through the food supply chain to final consumer consumption.

    “By our policy of aggregating grains and local farm products, we are creating jobs and boosting rural economy. We are determined to continue to ensure that our investments and processes aside from ensuring value for shareholders and other stakeholders continue to enrich the lives of our consumers, farmers, suppliers and other relevant stakeholders,” Coumantaros said.

     

     

     

     

  • Foreign core investor seeks to buy out 7-Up’s minority shareholders

    Affelka SA, the foreign majority core investor in Seven-Up Bottling Company Plc, has launched a bid to buy all outstanding shares held by minority shareholders in the company, in a move reminiscent of a similar decision by its competitor, Nigerian Bottling Company (NBC).

    Regulatory filing yesterday showed that Affelka SA has secured initial regulatory approval to acquire all the “outstanding and issued shares of seven-Up Bottling Company that are not currently owned by Affelka”.

    Affelka is offering N112.70 per share for the 171.54 million ordinary shares of 50 kobo each held by the minority shareholders, representing 26.78 per cent of Seven-Up Bottling Company’s issued share capital. The bid price represents 15 per cent premium on the last traded share price of the company on August 9, 2017, the last business day prior to the date the proposal was received from Affelka SA by Seven-Up Bottling Company’s board.

    According to the proposal, the acquisition would be carried out through a scheme of arrangement under Section 539 of the Companies and Allied Matters Act (CAMA) and other applicable rules and regulations.

    Already, Seven-Up Bottling Company has received the “No Objection” approval of the Securities and Exchange Commission (SEC). However, the scheme is still subject to the approval of the shareholders at a Court-Ordered Meeting as well as the approval of the Federal High Court.

    The NBC had acquired minority shares and delisted from the Nigerian Stock Exchange (NSE) amidst protests by Nigerian retail shareholders.

    The Nigerian Stock Exchange (NSE) had in October 2017 downgraded Seven-Up Bottling Company Plc from its special pricing status category following the depreciation in share price of the company.

    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.

    The NSE indicated that it downgraded Seven-Up Bottling Company from a “high-priced stock” category to the general stock category with effect from today, Monday October 23, 2017.

    With the reclassification of Seven-Up Bottling Company from the “high-priced stocks” list, stockbrokers will only be able to move the share price of the company with 50,000 shares.

    “We bring to your notice that 7up Bottling Plc has qualified to be reclassified from a high-price stock to a medium-priced stock, as the company’s shares hit below the N100 mark on 30 May 2017, and trades below N100 up till the close of business on 17 October 2017. This indicates that 7up Bottling Plc has traded below N100 in at least four out of the last six months. The stockbrokers will be able to move the price of 7up Bottling Plc with 50,000 units with effect from 23rd, October 2017,” the NSE stated.

  • Lafarge Africa buys out Ashaka Cement’s shareholders with 85.26m shares

    Lafarge Africa buys out Ashaka Cement’s shareholders with 85.26m shares

    Lafarge Africa Plc has issued and listed 85.26 million ordinary shares of 50 kobo each in the name of minority shareholders of Ashaka Cement (AshakaCem) Plc following the conclusion of share exchange agreement that seeks to fully consolidate the Gombe-based Ashaka Cement as a wholly-owned subsidiary of Lafarge Africa.

    Listing documents at the Nigerian Stock Exchange (NSE) yesterday indicated that a total of 85.26 million ordinary shares were listed in the name of Lafarge Africa Plc, raising the cement giant’s issued share capital from 5.491 billion ordinary shares of 50 kobo each to 5.576 billion ordinary shares of 50 kobo each.

    “The shares listed were issued to shareholders of Ashaka Cement in exchange for their shares in Ashaka Cement pursuant to a scheme of arrangement for capital re-organisation between Ashaka Cement and holders of its fully paid ordinary shares of 50 kobo each dated 26 September 2017,” the regulatory document indicated.

    Lafarge Africa had separately launched a Mandatory Tender Offer (MTO) and Voluntary Tender Offer (VTO) to acquire minority shares in AshakaCem. During the MTO and VTO, Lafarge Africa offered 57 new Lafarge Africa shares for 202 AshakaCem shares and a cash consideration of N2 per every AshakaCem exchanged.

    Shareholders of AshakaCem had at an extraordinary general meeting (EGM) in December 2016 approved the resolutions for a voluntary delisting of the company from the NSE. With the approval at the EGM, shareholders were given a 90-day window to decide on the exit plan on offer, in line with the requirements of the NSE on voluntary delisting.

    Within the 90-day period, shareholders had three options. They may decide to trade their shares on the NSE through their nominated stockbroker. Alternatively, shareholders may decide to receive consideration from Lafarge Africa in exchange for transferring their shares, on same terms as were for the MTO and VTO. On the other hand, shareholders may decide to retain their shareholdings in the unlisted AshakaCem.

    The board of Ashakacem said the voluntary delisting and full integration of the company as subsidiary of Lafarge Africa will offer minority shareholders many benefits, including revenue diversification by geography as a result of Lafarge Africa’s operations in Nigeria, South Africa and Ghana.

    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.

    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 NSE.

  • Shareholders back NSE’s one-kobo pricing rules

    Shareholders back NSE’s one-kobo pricing rules

    Retail shareholders have expressed support for the planned implementation of a new pricing rule that will allow stocks on the Nigerian Stock Exchange (NSE) to trade below their nominal value and as low as one kobo.

    The Nation had reported exclusively last week that the NSE has concluded arrangements to begin implementation of new pricing rules that will remove the current stopgap that has supported stocks at their nominal value and allow shares of quoted companies to trade as low as one kobo. The new rule shall stake effect on Monday January 29, 2018.

    President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar said the new rule will lead to more effective price discovery at the stock market.

    “It is good, there are many stocks that are not worth more than one kobo at the market but currently pegged at 50 kobo because of the nominal value rule,” Umar said.

    National President, Constance Shareholders’ Association of Nigeria, Mr. Shehu Mikail, said the new pricing rule may lead to increased liquidity in the dormant stocks since new price discovery may encourage investors to take risks in the low-priced stocks.

    According to him, the new pricing rule may enable dormant companies to attract new investors who are looking for bargains.

    “The new rule will create opportunity for most of the companies that have not been traded for a long time to come back on board. It may also make directors of the companies to take their share prices more serious,” Mikail said.

    However, Chairman, Standard Shareholders Association of Nigeria, Mr. Godwin Anono, said the new rule will lead to more losses for investors, urging the Exchange to sustain the current rule that limits price decline to the nominal value.

    He described the new rule as a double-edged sword that can fuel hostile acquisitions and cause disruptions in the market.

    He said the Exchange should focus on providing more accurate information about the market and protecting the integrity of the market rather than tinkering with rules.

    “It is another way of grounding a lot of companies. Leave it at 50 kobo, there are many ways of stimulating price discovery, it is not good,” Anono said.

    Under the new pricing rules, share prices shall be allowed to trade as low as a floor price of one kobo. The new rule will effectively remove the current rule which places minimum allowable price to trade for any stock at its nominal value, irrespective of the market forces.

    The new rules stipulates that “notwithstanding its par value, the price of every share listed on the Exchange shall be determined by the market, save that no share shall trade below a price floor of one Kobo per unit”.

    Par value is the nominal value of a share as stated in the Memorandum of Association of the company while price floor means the amount below which the price of one unit of a share shall not be permitted to trade, and the minimum amount which must be paid for a share in the event of a drop in the unit price of that share.

    Regulatory documents obtained by The Nation had indicated that the amendments to the pricing technology at the stock market will also see a categorisation of quoted companies under three groups with different pricing rules.

  • Lafarge Africa, Mutual Benefits seek N133.6b from shareholders

    Lafarge Africa Plc and Mutual Benefits Plc have launched bids to raise more than N133.6 billion through rights issue of new ordinary shares.

    The two companies yesterday separately filed application with the Nigerian Stock Exchange (NSE), seeking to raise new equity funds from existing shareholders.

    Lafarge Africa plans to raise N131.65 billion through a rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share. The new shares will be pre-allotted to shareholders on the basis of five new ordinary shares for every nine ordinary shares held as at the close of business yesterday.

    Mutual Benefits is seeking to raise N2 billion through a rights issue of 4.0 billion ordinary shares of 50 kobo each at nominal value of 50 kobo per share. The rights will be pre-allotted on the basis of one new ordinary share for every two ordinary shares held as at the close of business yesterday.

    LafargeHolcim, which holds the majority equity stake of 72.59 per cent in Lafarge Africa, has already indicated it will subscribe fully to its rights. LafargeHolcim had proposed to pick up its rights under a debt-for-equities deal that will see conversion of LafargeHolcim’s dollar-based loan to equities.

    Many Nigerian shareholders had raised objections to the debt-for-equities deal, which they said could give the majority core investor undue advantage to increase its controlling equity stake in the company.

    Chairman, Lafarge Africa Plc, Mr. Mobolaji Balogun, said the recapitalisation would help to reduce the group’s exposure to adverse foreign currency translation losses as experienced in 2016 following a 40 per cent depreciation of the Naira against the Dollar.

    He noted that the decision of LafargeHolcim to convert existing loans into equity demonstrates the core investor’s continued belief in the Nigeria story, pointing out that the rights issue is the largest so far in the Nigerian capital market and the largest investment in a listed company by an investor.

    According to him, the rights issue will help to reduce the group’s foreign currency exposure by 50 per cent while the remaining portion of the debt, with the support from LafargeHolcim, has been refinanced and hedged for 12 months.

    Lafarge Africa ended the third quarter with a marginal recovery in profitability as significant increase in net interest expense constrained the bottom-line. Despite about 39 per cent growth in sales, Lafarge Africa ended the third quarter with a pre-tax profit of N1.08 billion.

    Key extracts of the interim report and accounts of Lafarge Africa Plc for the period ended September 30, 2017 showed that sales rose by 38.9 percent to N223.67 billion in 2017 as against N161.04 billion recorded in comparable period of 2016. Gross profit also surged from N18.11 billion in 2016 to N57.31 billion in 2017. The cement manufacturer pooled operating income of N18.40 billion in 2017 compared with operating loss of N32.97 billion in comparable period of 2016.

    However, net finance expense jumped from N7.4 billion to N17.31 billion. Profit before tax thus depressed to N1.08 billion, albeit a considerable recovery when compared with pre-tax loss of N40.37 billion in 2016. After taxes, net profit stood at N937.91 million by September 2017 compared with net loss of N37.4 billion in 2017. Earnings per share was modest at 10 kobo in 2017 compared with net loss per share of N8.27 in corresponding period of 2016.