In order to forestall insider dealings, the company cautioned that no director, employee, persons discharging managerial responsibility and advisers of the company and their connected persons may directly or indirectly deal in the shares of the company until information regarding the rights issue price is released on the NSE.
At a low of N13.40 per share and year-to-date decline of 70 per cent, Lafarge Africa is the worst-performing stock at the NSE so far this year.
Lafarge Africa plans to float a N90 billion rights issue this month, its second rights issue in 14 months. Shareholders had approved the plan by the company to raise about N90 billion in new equity funds as it seeks to deleverage its balance sheet and restructure short-term loans.
At a recent extraordinary general meeting in Lagos, shareholders approved resolutions authorizing the company to create additional 10 billion ordinary shares of 50 kobo each to increase its authorized share capital to 20 billion ordinary shares.
Shareholders also authorized the board of the company to raise capital of N90 billion by way of a rights issue of ordinary shares to its shareholders and that the rights issue be executed at such price, time, for such period and on such other terms and conditions as the directors may deem fit.
Also, the meeting granted the board the authority to apply any convertible loan, shareholder loan or any other loan facility due to any person, from the company, as may be agreed by the person and the company, towards payment for any shares or rights subscribed for in the rights issue.
Shareholders also authorized the company to enter into a related party transaction to accept loan facility from Lafarge Holcim, the foreign majority core investor which holds 76.32 per cent equity stake.
Chairman, Lafarge Africa Plc, Mr Mobolaji Balogun, said the additional capital to be raised will further help to deleverage the company’s balance sheet and provide head room for the expansion of its business.
He said the company foresees a stable pricing environment and favourable economic conditions in its Nigeria market while its South Africa operations are undergoing a turnaround plan.
Chief Executive Officer, Lafarge Africa Plc, Mr. Michel Puchercos said the company’s refinancing plan is aimed at preparing for future development in Nigeria by improving the company’s leverage as well as strengthening its profitability.
Lafarge Africa had sold its November 2017’s rights issue of about 3.1 billion ordinary shares of 50 kobo each at N42.50 per share.
Key extracts of the interim report and accounts of Lafarge Africa for the nine-month period ended September 30, 2018 showed that sales rose from N223.67 billion in third quarter 2017 to N234.30 billion in third quarter 2018. With cost of sales rising from N165.76 billion to N178.21 billion, the cement company however ended with a pre-tax loss of N14.36 billion in 2018 as against pre-tax profit of N1.09 billion in comparable period of 2017.
After tax gain of N4.04 billion, net loss after tax stood at N10.37 billion in third quarter 2018 compared with net profit after tax of N937.91 million in comparable period of 2017. With these, loss per share for the nine-month period stood at N1.20 in 2018 as against positive earnings per share of 10 kobo in corresponding period of 2017.