Lafarge Africa Succeeds with N89.2bn Rights Issue



Goddy Egene

Lafarge Africa Plc has successfully raised fresh capital of N89.212 billion from existing shareholders through a rights issue of N7.434 billion ordinary shares of 50 kobo each at N12.00 per share.

In a notification to the Nigerian Stock Exchange (NSE), Lafarge Africa Plc said the rights issue was 100 per cent subscribed. It explained that a total of 1,826 applications for 7,434,367,256 ordinary shares were accepted and were found valid under the terms of the issue and were processed accordingly.

The N89.2 billion rights issue was the company’s second issue within two years having raised N132 billion the previous year. The company had raised that capital by issuing 3.1 billion ordinary shares of 50 kobo each at N42.50 per share.

Shareholders of the company had last September approved the raising of fresh capital in line with the firm’s refinancing plan. The Chief Financial Officer (CFO) of Lafarge Africa Plc, Mr. Bruno Bayet, had said the a refinancing plan was aimed at preparing it for future development in Nigeria, improving the company’s leverage as well as strengthen its profitability.

The Chairman of Lafarge Africa, Mr. Mobolaji Balogun had the additional capital to be raised will further help to deleverage the company’s balance sheet and provide head room for the expansion of our business.”

According to him, the board of directors is mindful of the support of all our shareholders through the difficult but necessary journey to transform the company into a more agile and correctly financed business ready to benefit from the potential opportunities in Nigerian building materials (market).

He also assured shareholders that restructuring of the capital structure of the company largely completed through the past year would help to significantly reduce the cost of financing and currency translation risk.

Balogun added that the company is implementing a new route-to-market initiative aimed at supporting the anticipated growth in demand as the country gradually recovers from recession and as foreign exchange rates stabilise.

Shareholders are currently awaiting the financial performance of Lafarge Africa Plc for the full year ended December 31, 2018. The company had announced revenue of N234.30 billion for the nine months ended September 30, 2018, up from N223.67 billion in 2017.

Loss after tax stood at N10.37 billion as against a net profit after tax of N937.91 million in comparable period of 2017.

Meanwhile, trading at the stock market resumed on negative note as the Nigerian Stock Exchange (NSE) All-Share Index fell by 0.9 per cent to close at 31,636.66.