The shareholders of Lafarge Africa Plc, coming out of the company’s 58th Annual General Meeting (AGM) in Lagos Wednesday approved the proposed business combination with Unicem that would see the size of the company increase to position it for market competition.
They also approved the payment of N1.05 as dividend per share presented by the directors. The board of directors of the company equally sought and got the approval of the shareholders to issue scrip dividends or right issue of about N140 billion.
Uzoma Uja, Lafarge company secretary said the proposals are expected to strengthen the balance sheet and capital structure of the company by reducing foreign currency exposure and optimizing the Lafarge Africa organization, adding that combined with improved (operating) performance, the proposals will strengthen Lafarge Africa’s expansion in Nigeria.
Unicem, a 100% owned subsidiary of the company, has Forex loan of approximately USD600m, which was incurred for the completion of a 2,5mtpa production line and the commissioning of line 2, another 2,5mtpa production output.
Between Q4 2016 and April 2017, 50% of the outstanding loan was hedged using the Non-Deliverable Futures window of the Central Bank of Nigeria.
But under the rights issues, LafargeHolcem Group will take up its rights and convert its portion of the loan to equity.
When the rights issue is opened, all shareholders will have the same proportionate rights in line with their shareholding in the company.
Mobolaji Balogun, chairman of the company, said the proposed dividends, represent 34.7 per cent of net income after taxation.
“The economic environment we were confronted with in 2016 and the exceptional items which contributed to reduced profit after tax, meant that a decision not to pay dividend would not have been unreasonable.
“However, the company’s board of directors felt the need to reward the support of all pour shareholders over the years,” he said.
He said the company’s turn-around plan launched at the beginning of 2016 Q3 was already impacting positively on the financial results of 2017.
According to him, the plan resolves around achieving high reliability across Lafarge’s production facilities, increasing the use of alternative fuel (biomass) and locally-sourced coal as a way to mitigate disruption of production by gas supply shortages and the impact and the impact of devaluation on cost of gas.
Frontpage October 22, 2019