By OLUSHOLA BELLO, Lagos
The Board of Directors of Lafarge Africa Plc has announced a closed period for its shareholders on its proposed N140bn right issue.
A rights offering is an issue of rights to a company’s existing shareholders that entitle them to buy additional shares directly from the company in proportion to their existing holdings within a fixed time period.
The cement producing firm in a notice filed with the Nigerian Stock Exchange (NSE) on Friday in Lagos also said it had commenced a closed period which started on September 20, 2017 to close on September 27, 2017.
The notice signed by its company secretary and legal director, Mrs Edith Onwuchekwa, noted: “We write sequel to our notice of an Extra-Ordinary Board Meeting scheduled on September 26, 2017, to consider the terms of the Rights Issue.
“In compliance with Rules 17.17 (b) (3) and 17.18 (b), this is to formally notify you that Lafarge Africa Plc’s closed period commenced September 20 , 2017, and will end on September 27, 201”.
The shareholders of Lafarge Africa at the company’s Annual General Meeting on June 8, 2017 approved a N140 billion rights issue.
Speaking at the AGM, the chairman, Board of Directors of Lafarge Africa, Mr. Mobolaji Balogun, said subscription to the rights issue, which will take place by the beginning of third quarter 2017, is expected to be finalised by October at the latest.
LafargeHolcim, the company’s largest shareholder, is expected to subscribe to its rights by converting the existing debt into equity.
Commenting on the rights issue, Balogun noted that the decision of LafargeHolcim to convert existing loans into equity demonstrates the group’s continued belief in the Nigeria story.
“This is the largest rights issue and the largest investment in a listed company by an investor”, he added.
The company said it was embarking on the rights issue to reduce its exposure to adverse foreign currency translation losses as experienced in 2016, following a 40 per cent depreciation of the naira against the dollar.
While listing the benefits of the recapitalisation exercise, the Lafarge chairman said, “It reduces our foreign currency exposure by 50 per cent. The remaining portion of the debt, with the support from LafargeHolcim, has been refinanced and hedged for 12 months”.
Lafarge Africa Plc is a building materials company with segments that include Nigeria and South Africa. Its subsidiaries include Lafarge Ready Mix Nigeria Limited, AshkaCem Plc, Atlas Cement Company Limited, LSAH, The United Cement Company of Nigeria Ltd (UniCem) and Egyptian Cement Holdings (ECH).
Lafarge Ready Mix Nigeria Limited is in the business of producing ready mix concrete for the construction industry.
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