Lafarge Africa Repays N33.6bn Bond from Internally Generated Cash Flow
By Dipo Olowookere
The N33.6 billion series 2 bond issued by Lafarge Africa in 2016 under its N100 billion bond issuance programme has been repaid, the cement manufacturing company has confirmed.
The note with a 5-five tenor and a coupon rate of 14.75 per cent was redeemed by the organisation after its maturity a few days ago, a disclosure from the firm stated.
Business Post reports that when Lafarge Africa approached the market for the debt five years ago, it stated that it would use proceeds from the sale to part-refinance the debt of its wholly-owned subsidiary, United Cement Company of Nigeria Limited.
“The proceeds of this issue will allow Lafarge Africa Plc to part-refinance the debt of its new wholly-owned subsidiary, Unicem.
“These proceeds will deliver savings in financing costs to Unicem and Lafarge Africa. Unicem is currently undergoing a 2.5mtpa capacity expansion which will be completed by the end of 2016,” the then Group Managing Director/CEO of Lafarge Africa, Mr Michel Puchercos, who now heads the company’s industry rival, Dangote Cement, had said.
Chapel Hill Denham had acted as the lead financial adviser, lead issuing house and lead book runner on the transaction, while Citibank Nigeria was the joint lead financial adviser and book-runner, with Standard Chartered and Stanbic IBTC as the joint issuing houses and book runners.
On June 17, 2021, Lafarge Africa provided an update on the paper, informing the investing community that holders of the bond have been repaid after maturity on Tuesday.
The cement giant disclosed that the redemption of the debt was made from its internally generated cash flow, adding that it has no outstanding issued bond under the N100 billion bond issuance programme.
“Lafarge Africa announces the redemption of its matured N33.6 billion bond due on June 15, 2021.
“The company registered a N100 billion bond issuance programme in June 2016, out of which the sum of N60 billion was issued in series 1 and 2 of the programme.
“The matured series 1 bond was issued on June 10, 2016, with a 3-year tenor and at a fixed coupon of 14.25 per cent, which has been repaid, while the matured series 2 bond issued on June 15, 2016, with a 5-year tenor at a fixed tenor of 14.75 per cent has now been repaid.
“The company leveraging on its performance and its recently concluded management strategic plans to systematically deleverage the company has redeemed the series 2 bond from internally generated cash flow.
“In view of this, the company has no outstanding issued bond under the N100 billion bond issuance programme,” the notice signed by the Chief Financial Officer, Lolu Alade-Akinyemi, said.