Lafarge Africa Plc is set to raise N131.65 billion from its existing shareholders by offering a total of 3,097,653,023 new ordinary shares at N42.50 kobo per share, based on a ratio of five new ordinary shares for every nine held.
The issue price represents a discount of approximately 17.5 percent to the closing price of N51.48 kobo as of September 22, 2017. The offer which opens on Friday, November 24, 2017, is expected to close on Friday, December 15, 2017.
Michel Puchercos, the group managing director of Lafarge Africa Plc disclosed this recently at the ‘Facts Behind the offer’ presentation to the capital market community at the Nigerian Stock Exchange (NSE) in Lagos.
Bruno Bayet, the chief financial officer of the company, who spoke to stockbrokers and financial journalists during the presentation, said the proceed of the right issue will be used for the refinancing a portion of the company’s foreign currency denominated shareholders loans, by way of debt to equity conversion, and finance working capital requirement as well as expand operations.
He explained that most investments in the company have been through internally generated revenue or debt from the majority shareholder, pointing out that the proceeds of the rights will resolve equivalent of $270 million of the debt effectively almost halving the foreign exchange exposure.
In addition, 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 percent depreciation of the naira against the United States dollar.
The Right Issue is probably one of the largest transactions undertaken by a multinational in Nigeria s domestic market and represents a huge opportunity for resolving the exposure of the company to foreign exchange risk. It would also provide shareholders the opportunity to increase their investment in the company.
Through the offer, LafargeHolcim, the parent company is expected to subscribe to its rights by converting the outstanding value of WAPCO’s dollar-denominated quasi-equity instrument of ₦150 billion (using the current exchange rate of NGN305/USD) into equity.
Meanwhile, Lafarge Africa, against all odds, has re-assured market operators of its commitments towards sustainable growth that will deliver returns to all stakeholders.