Lafarge to sell South Africa subsidiary for $316.3m… redeems N26.4bn bond
Lafarge Africa Plc has announced the
proposed sale of 100 per cent of the issued share capital in Lafarge
South Africa Holdings Limited to Caricement B.V, a subsidiary of
The firm said in a statement that
LafargeHolcim agreed to purchase the shares for the consideration being a
set-off of all the outstanding amounts due by the company to Caricement
under the Inter-Group Loan Agreements at the closing date, which is
July 31, 2019.
It said the value of the consideration
at the closing date was $316.3m, being the sum total of the principal
sum of $293m plus all accrued interest of $23.3m as of July 31, 2019.
The statement read in part, “As part of
the audit exercise with respect to the 2018 accounts, KPMG Professional
Services, as auditors of the company, informed the company’s management
that based upon its assessment of the 2018 performance of LSAH, the
valuation would have to be impaired to a tune of N70bn.
“The board, acting within its regulatory
duties, delayed the approval of the 2018 accounts while seeking the
optimal resolution of this significant issue, which had a potential
major impact on shareholders’ value in the company.
“During deliberations by the board on
this matter, various options were considered including exit from South
Africa. The board then arrived at the conclusion that the disposal of
LSAH was the best option for halting the potential impairment.”
Lafarge said the proposed sale was
expected to enhance the value of shareholders’ investments, which was of
utmost importance to the board.
It said following the conclusion of the proposed sale, its shareholder loan of $293m would be completely extinguished.
The company also announced the redemption of its three-year fixed rate series 1 N26.4bn bond, which matured on June 15, 2019.
Another statement on Wednesday said the
company had registered a N100bn bond issuance in June 2016, out of which
the sum of N60bn was issued in series 1 and 2 of the programme.
It said the matured series 1 bond was issued on June 10, 2016 with a three-year tenor and at a fixed coupon of 14.25 per cent.
The statement read in part, “The
company, leveraging its performance, recently concluded its rights issue
as well as a strategic management plan to systemically deleverage the
company by redeeming the series 1 bond from internally generated
“The outstanding balance of N33.6bn
represents series 2 of the N100bn issuance programme at a fixed coupon
rate of 14.75 per cent; a five-year tenor and matures for redemption in
Punch: June 20, 2019