Lafarge Africa is consolidating its operations on the continent to simplify its ownership structure and activities, the Head of Strategy, Wole Adeleke, has said.
He said on Monday that the decision was made three years ago after Lafarge combined its Nigerian business with its South African operations and listed the combined entity, which it renamed Lafarge Africa, on the Nigerian Stock Exchange.
Now seeking approval from the Securities and Exchange Commission to merge the operations of two other wholly-owned units, in a move engineered to consolidate management of the companies with no operational savings, Reuters quoted Adeleke as saying.
In a notice to the stock exchange, Lafarge Africa said its board had asked the company to “undertake a business combination with United Cement Company of Nigeria Limited and Atlas Cement Company Limited.”
“We needed to simply the ownership structure of Unicem. Because Unicem has some significant tax attributes it was decided that Unicem should be merged into Lafarge Africa,” he told Reuters.
Unicem is the third largest cement plant in Nigeria.
Lafarge has been consolidating its businesses in Africa to cut costs and accelerate growth, particularly with arch-rival Dangote Cement, owned by Africa’s richest man Aliko Dangote, expanding aggressively on the continent.
Last month, Holcim Nigeria, now part of Lafarge Africa, said it would pass a resolution in August to dissolve the company after its Swiss-based parent firm merged with French rival, Lafarge in 2015.
It also delisted NSE-listed Ashaka Cement after a buyout of minorities that breached stock exchange’s free float requirement, Adeleke said.
The Nigerian-based business of Franco-Swiss cement group, LafargeHolcim, expects to generate cost saving synergies of N9bn by 2018 in Nigeria, it has said, following the global merger two years ago.
Shares in Lafarge Africa gained 1.69 per cent on Monday, adding to a 44 percent rise so far this year, valuing the cement firm at N329.2bn ($902.3m).
LafargeHolcim Chairman, Beat Hess, said the company was still adjusting its structures in big markets where both Lafarge and Holcim were present following the merger.
Lafarge Africa is raising N140bn in fresh equity and plans to convert some loans into shares as part of a planned rights issue after it reported losses last year.
LafargeHolcim has said it will take part in a capital increase of the Nigerian unit to avoid diluting its nearly 71.4 per cent stake, in a move which would also help simplify the ownership structure in Nigeria.
Source:© Copyright Punch Online
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