Lafarge Africa to raise N60b in new bond issue
New MD takes over amid declining sales Lafarge Africa Plc plans to raise N60 billion through a short-to-medium term bonds issue as the cement company moves to refinance its debts and restructure its balance sheet.
The debt capital raising will be through a book building process and it is expected that the book building will commence this month.
The net proceeds of the bond issue will be used to refinance the third party debts of a subsidiary company, UniCem.
The new bond issue 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, including the appointment of a new managing director.
Lafarge Africa on Thursday announced the appointment of Michel Puchercos, a French national, as group MD and CEO. Puchercos, who has worked across the global operations of Lafarge Africa, is expected to drive the performance of the cement group.
Lafarge Africa suffered a loss before tax of N2.22 billion in first quarter 2016 as turnover dropped by 29.3 per cent.
Key extracts of the unaudited report and accounts of Lafarge Africa for the three-month period ended March 31, 2016 showed that turnover dropped from N74.12 billion in first quarter of 2015 to N52.42 billion in first quarter of 2016. Gross profit dropped from N24.95 billion in 2015 to N7.81 billion.
As against pre-tax profit of N6.09 billion in first quarter 2015, the company recorded a pre-tax loss of N2.22 billion. After taxes, net loss stood at N1.87 billion as against net profit of N5.83 billion in comparable period of 2015.
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.
Lafarge Africa said it expects 2016 to be vibrant, driven mostly by the individual home segment while it remains confident about the future.