Lafarge Africa Plans EGM, Seeks Shareholders’ Approval For N90bn Rights Issue

The board of Lafarge Africa Plc, on Monday, wrote the Nigerian Stock Exchange (NSE), announcing plans for an Extra-Ordinary General Meeting (EGM) on September 25, 2018, in Lagos, to authorize the directors to raise up to N90bn in fresh capital by way of rights to existing shareholders.
The company will also seek approval “to apply any convertible loan, shareholder loan or any other loan facility due to any person, from the company, as may be agreed by the person and the company, towards payment for any shares or rights subscribed for in the rights issue.”
The shareholders had at the 59th annual general meeting on May 16, 2018, approved the raising of up to N100bn in additional capital, subject to the approval of relevant regulatory authorities.
At the EGM, according to the notice signed by Mrs. Adewunmi Alode, the Company Secretary, shareholders will also vote on special resolutions, including the increase of the authorized share capital of Lafarge Africa from N5bn to N10bn “by the creation of 10bn additional ordinary shares of 50 kobo each, ranking pari passu in all respect with the existing ordinary shares of the company…”
According to the explanatory notes, Lafarge Africa was indebted to LafargeHolcim, its parent company (with 76.32% stake) to the tune of $659.2m, prior to the conclusion of the rights issue in 2017. The debt, which has since dropped to $315.2m, was said to have represented the balance of short term intercompany loans advanced by the parent company to United Cement Company, prior to Holcim Group’s global merger with Lafarge S.A., with made Lafarge Africa assume the position of the borrower. The loan, in two tranches, was used to complete lines 1 and 2 of the 5m metric tonne per annum cement plant at Unicem’s Mfamosing plant in Calabar, Cross River State, as well as the purchase of 15% equity in Unicem from Flour Mills of Nigeria Plc.
As part of restructuring arrangement, $220m due to Caricement BV is to be split into eight facilities to enable repayment by Lafarge Africa from its cash flows.
The rights issue is therefore enable LafargeHolcim convert $22.2m of the loan into equity through the N90bn rights subject to shareholders approval.
Also at the EGM, shareholders are expected to approve the appointment of Rossen Papazov, Country Chief Executive Office (CEO) of Lafarge South Africa Holdings, as a non-executive director of Lafarge Africa.