Lafarge Africa Plc, the continent’s second-biggest cement producer, plans to raise as much as ₦90 billion ($249 million) through a share sale in Nigeria that will be used to lower its debt levels.
The company’s Chief Financial Officer, Bruno Bayet, was quoted by Bloomberg as saying that the sale would take place by the fourth quarter, after the company reported a loss.
The move by the Lagos-listed unit of Switzerland-based LafargeHolcim Limited would be on top of a rights issue of about ₦130 billion late last year.
“Profit is affected by leverage, so it needs to be brought down,” he was quoted as saying.
The company’s total debt dropped to about $600 million in 2017 from more than $1 billion.
It expects its leverage ratio, which measures the level of debt incurred against its assets, to drop to between 60 per cent and 70 per cent “over the next 18 months,” from more than 100 per cent, the Chairman, Lafarge Africa, Mobolaji Balogun, said in May.
Lafarge Africa’s loss for the six months through June 30 narrowed to ₦3.9 billion from ₦19.7 billion in the previous year, it said in a Nigerian Stock Exchange filing. Revenue increased by four per cent to ₦162.3 billion.
The stock retreated by 10 per cent, the most since June 2013, to ₦29.25, the lowest since April 2010, by 11:38 a.m. in Lagos, making it the worst performer on the 164-member NSE All-Share Index.