By Modupe Gbadeyanka
The possible issuance of a N100 billion bond later this year by Lafarge Africa Plc has received a huge boost with the approval given by shareholders of the company.
At the firm’s 59th Annual General Meeting (AGM) held in Lagos on Wednesday, the shareholders also approved the payment of N13.01 billion dividend proposed the board.
The approved dividend is for the year ended December 2017 and it represents N1.50 per share, which is more than the N1.05k per share paid in 2016.
Business Post gathered that the intended N100 billion bond issuance is mainly to refinance the company’s debts.
“The proposal this year is to refinance some of that debt. We cannot continue to sit on a large concentration of dollar-denominated debts and therefore, we need to refinance,” Chairman of Lafarge Africa Plc, Mr Mobolaji Balogun, informed shareholders at the meeting yesterday.
Recall that last year, the company raised the sum of N131.6 billion through Rights Issue.
According to Mr Balogun, Lafarge Africa had a debt of $600 billion in 2016 and in order to address the impact on the business, $300 million was hedged through non-deliverable forward forex contracts provided by the Central Bank of Nigeria (CBN).
Speaking further, he said the company’s total debt has been reduced to N238 billion from N389 billion as a result of the 2017 rights issue and cash generated from its operations.
The Chairman assured shareholders to expect a huge turnaround in the next 12 months.
“By the next 12 months, you will see the benefits of our turnaround plan, which is beginning to show in our Nigerian operations, and will be extended to our South Africa subsidiary,” he assured.
He said the board was already reviewing options to deal with the remaining foreign exchange debt, emphasising that “we cannot continue to sit with large contribution of dollar-denominated debt in a company generating mostly naira. We need a match in currency perspective.”
