PPC may raise $450m to fund Africa expansion
PPC, South Africa’s largest cement maker, has agreed in principle to a $225 million loan facility and could raise twice that amount to fund expansion in Africa, according to Chairman Bheki Sibiya.
Sibiya has received a letter from an institution indicating their support to finance the company’s projects on the continen. PPC may raise as much $450 million from the unnamed lender, Sibiya said.
PPC is expanding in African countries where demand for cement outstrips supply, and plans to generate 40% of revenue from outside South Africa by 2017. The strategy is at risk because a deal to obtain $200 million of funding is close to collapse, former CEO Ketso Gordhan said November 4.
“What he is saying is devoid of any basis,” Sibiya said. “Since it is untrue, it cannot hamper our growth. The institution has written to us to specifically indicate that they are keen to do business with PPC.”
Without the funding, the purchase of a 49% stake in Hodna Cement of Algeria as well as potential new deals may not happen, Gordhan said.
“The due diligence is likely to be completed and therefore we are moving toward the signing of the agreement,” Sibiya said of the loan. “We still have other sources of funding, maybe marginally more expensive but we have a good pipeline of funding options for our projects.”