Shareholders of Lafarge Africa has approved the company’s intent to raise N90 billion through a rights issue.
At an extraordinary general meeting that held on Tuesday at Muson Centre in Lagos, the shareholders also approved the restructuring of its outstanding short-term $315 million shareholder loans.
“The additional capital to be raised will further help to deleverage the company’s balance sheet and provide headroom for the expansion of our business,” Mobolaji Balogun, chairman of the board of directors said.
Michel Puchercos, Lafarge’s CEO, also said the funds will help the company prepare for future development in Nigeria.
“It is aimed at preparing for future development in Nigeria, improving the company’s leverage as well as strengthen its profitability,” the CEO said.
At the annual general meeting that held in May, the company had said it would issue a N100 billion bond before the end of 2018.
Balogun had said the company needed the funds to refinance the $600 billion debt it incurred.
“In order to address the impact on the business, $300 million was hedged via non-deliverable forward FX contracts provided by the Central Bank of Nigeria,” he told shareholders.
“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.”
The company said it hoped for a stable pricing environment and favourable economic conditions in Nigeria while its South African operations undergo a turnaround.