Lafarge Africa Plc is to raise N60 billion to refinance its debts and restructures its balance sheet for optimum performance in the years ahead. The N60 billion would be raised through second tier bond with short-to-medium tenors of two, three and five years.
According to the company, the bond would be through book building process that will commence this month. Already Lafarge Africa has submitted application to the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE).
The company said the net proceeds of the bond will be used to refinance the third party debts of a subsidiary company, United Cement Company Limited (UniCem).
It explained that the fund raising is part of a co-ordinated plan to optimise the synergies from the recent integration of the South African and Nigerian operations of the group and the appointment of Michel Puchercos as new managing director/chief executive officer last week.
Puchercos, who has worked across the global operations of Lafarge Africa, is expected to drive the performance of the cement group.
Lafarge Africa recorded a drop in turnover from N74.12 billion in first quarter of 2015 to N52.42 billion in first quarter of 2016. Gross profit fell from N24.95 billion in 2015 to N7.81 billion.
Speaking on the outlook for the cement group, Puchercos said Lafarge Africa was poised to deliver better performance as its plant operations were stabilising, with gas utilisation accounting for more than four-fifth of operations.
“Overall, our plants are expected to deliver stronger operational results in future quarters of 2016,” Pucheros said.
He said in spite of the macroeconomic challenges, the company will continue to deliver good performance with significant upsides to come as it concludes on the integration journey to form Lafarge Africa Plc.
“The company’s new organisation is much stronger and better positioned to deliver operational excellence and improve value to our shareholders,” Puchercos said.
Puchercos, a graduate of Ecole Polytechnique and the National School of Rural Engineering, Waterways & Forests, France, joined Lafarge as Head, Strategy and Purchasing in Orsan, Lafarge Biochemistry, and in 1998 became Director of Cement Strategy and Information Systems, Lafarge Gypsum. In 2003, Michel became the Director of Cement strategy, Lafarge Group in France.
In 2005, he moved into cement operations as the CEO for Lafarge operations in Kenya and Uganda while doubling as the Chairman of Tanzania operations. While in this role, he was the Head of African Health as well as Supply Chain Management Committees for East and Southeast Africa.
After four years in Sub-Saharan Africa, Puchercos moved to Asia as the President and CEO of Lafarge South Korea, where he remained for seven years. While in this role, he was also a Special Advisor to the Chairman as well as a Board Member at Aso Cement in Japan.