Lafarge Africa Unveils N131.65bn Rights Issue

Lafarge Africa Plc, on Wednesday, joined the league of companies that have so far come to the new issues market of the Nigerian Stock Exchange (NSE) to raise fresh capital by way of rights to existing shareholders.
In a notice signed by its Company Secretary and Legal Director, Edith Onwuchekwa (Mrs), the company said it plans to raise N131.65bn by issuing five new shares for every nine held by shareholders at the cost of N42.50 per unit.
This, the statement said, represents a discount of 17.44% to the company’s closing price on Friday, September 22, 2017.
While qualification date is to be announced at a later date, the statement explained that the decision to issue rights was taken by the board at its meeting on September 26, 2017.
Through the offer, LafargeHolcim, the parent company is expected subscribe to its rights by converting the outstanding value of WAPCO’s dollar denominated quasi-equity instrument of ₦150 billion (using current exchange rate of NGN305/USD) into equity.
Commenting on the rights issue, the first since 2005, Bolaji Balogun, chairman of Lafarge Africa, said the recapitalisation exercise is to help the company reduce its “foreign currency exposure by 50%.
“The remaining portion of the debt, with the support from LafargeHolcim, has been refinanced and hedged for 12 months,” he assured shareholders at the last annual general meeting in June.
He noted that the decision to convert existing loans into equity “demonstrates the group’s continued belief in the Nigeria story,” adding that, “This is the largest rights issue and the largest investment in a listed company by an investor.”
The company said it was embarking on the rights issue to reduce its exposure to adverse foreign currency translation losses as experienced in 2016 following a 40% depreciation of the naira against the United States dollar.

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