Lafarge Africa Plc, indicated commitment to the timetable for its rights issues planned to be completed by the end of the fourth quarter (Q4) 2017, as it has submitted application on the proposed rights issues to the Nigerian Stock Exchange (NSE).
the NSE in its weekly market report for the week ended Friday 3rd November 2017 on the theme “proposed rights issue “revealed that Lafarge Africa Plc through its Stockbrokers; Pilot Securities Limited during the week, submitted an application for approval and listing of a Rights Issue of 3,097,653,023 Ordinary Shares of 50 Kobo each at N42.50 kobo per share on the basis of 5 new ordinary share for every 9 ordinary shares held.
The Qualification Date for the Rights Issue, according to the release, was Wednesday, 1st November 2017. Daily Times Nigeria recalls that the board of directors of Lafarge Africa Plc, on 26TH September 2017 held an extraordinary meeting and considered the terms of the firm’s new capital raising.
Shareholders of Lafarge Africa on 7th June 2017 at its Annual General Meeting in Lagos, endorsed the board of director’s proposal to raise new equity capital of N140 billion in a major move to enhance operations and take new business opportunities.
Lafarge Africa is raising the new equity fund through a rights issue, from only existing and qualified shareholders. Following shareholders’ approval given to the board, towards end of Q3 2017, precisely on 26th September 2017, the board met and endorsed the rights strategic steps, including terms of rights issue as it approved to raise N131.65 billion by way of rights issue at N42.50 naira per share, through the rights offer of 5 new shares for every 9 shares held by investors.
It noted that the rights price represents about 17.44 percent discount on Lafarge Africa’s closing price at sept N22, as it waits regulatory endorsement.
Lafarge Africa had planned to launch its rights issue later this month and finalise the offer by the fourth quarter. LafargeHolcim, which holds the majority equity stake of 72.59 per cent in Lafarge Africa Plc, has indicated it will subscribe fully to its rights.
LafargeHolcim will pick up its rights under a debt-for-equities deal that will see conversion of LafargeHolcim’s dollar-based loan to equities.
However, many Nigerian shareholders raised objections to the debt-for-equities deal, which they said could give the majority core investor undue advantage to increase its controlling equity stake in the company.
Chairman, Lafarge Africa Plc, Mr. Mobolaji Balogun, said 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.
He added that the recapitalization would help to reduce the group’s exposure to adverse foreign currency translation losses as experienced in 2016 following a 40 per cent depreciation of the Naira against the Dollar.
