Lafarge Africa lists N131b rights shares

Lafarge Africa Plc has listed about 3.1 billion ordinary shares of 50 kobo each, increasing the cement company’s market capitalisation to N278.79 billion at the weekend.

The supplementary shares arose from the cement company’s recent rights issue. Lafarge Africa had on November 24, 2017 launched an offer to raise N131.65 billion through a rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share. The new shares were pre-allotted to shareholders on the basis of five new ordinary shares for every nine ordinary shares held as at the close of business on November 1, 2017. The acceptance list opened on Friday November 24, 2017 and ran till the close of business on Friday, December 15, 2017.

With the listing of the additional shares totalling 3.098 billion ordinary shares, the total issued and fully paid up shares of Lafarge Africa increased from 5.576 billion to 8.673 billion ordinary shares.The allotment results earlier showed that LafargeHolcim, which held the majority equity stake of 72.59% in Lafarge Africa, fully picked up its rights, contributing some N96 billion to the recapitalisation. LafargeHolcim had earlier indicated it would subscribe fully to its rights under a debt-for-equities deal that will see conversion of LafargeHolcim’s dollar-based loan to equities.

Chairman, Lafarge Africa Plc, Mobolaji Balogun has said the recapitalisation would help to reduce the group’s exposure to adverse foreign currency translation losses as experienced in 2016 following a 40% depreciation of the Naira against the Dollar.In the third quarter ended September 30, 2017, Lafarge Africa’s net finance expense jumped from N7.4 billion in third quarter 2016 to N17.31 billion in 2017.

Balogun noted that the decision of LafargeHolcim to convert existing loans into equity demonstrates the core investor’s continued belief in the Nigeria story, pointing out that the rights issue is the largest so far in the Nigerian capital market and the largest investment in a listed company by an investor.

According to him, the rights issue will help to reduce the group’s foreign currency exposure by 50% while the remaining portion of the debt, with the support from LafargeHolcim, has been refinanced and hedged for 12 months.