Shareholders of Lafarge Africa Plc at its 60th Annual General Meeting (AGM) Monday July 22, 2019, in Lagos expressed displeasure with the board and management over lack of dividend from the cement manufacturing company. Even though the company was able to recover from a loss of N8.8 billion in the full year of 2018 to a profit of N3.14 billion in the first quarter ended March 31, 2019.
Just as the chairman of the company, Mobolaji Balogun has assured shareholders of better performance going forward following the reduction in its debt to very low level. Lafarge Africa Plc’s fortunes have been affected negatively in recent years by huge debt, non-performing subsidiaries, particularly South Africa business and high cost of operations.
Balogun, said the company had reduced its debt by $1.1 billion in last three years, noting that efforts are being made to ensure further reduction in the debt. According to him, part of the effort was the proposal to sell its shares in Lafarge South Africa Holdings Propriety Limited (LSAH), which the shareholders approved at the AGM.
With the proceeds from the proposed sale, it is expected that Lafarge Africa’s shareholder loan as at July 31, 2019, will be completely paid off. The loan represents the only existing foreign currency loan in the books of the company. Balogun, explained that the balance restructuring will impact on the company positively, disclosing that cost of finance will reduce by N168 billion, while net debt at the end of July 2019 will be about N56 billion.
according to him “With the sale of LSAH as proposed by the Board to shareholders the only debt that will remain on the books of the company will be the second tranche of the corporate bond due for redemption in June 2021 and the subsidised loan in respect of Central Bank of Nigeria (CBN) Power Intervention Funds through the Bank of Industry(BoI). This significant reduction in debt holds prospects for dividend distribution in future,” he said.
on his part, the Managing Director, Mr. Michel Puchercos, appreciated the understanding showed by the shareholders in approving the Board’s proposals. He maintained that management was determined to deliver on the trust expressed by the shareholders. “We are delighted with the understanding by our shareholders on the need to focus our business in Nigeria. The approval of the proposed sale of Lafarge South Africa by the shareholders will cut debts service obligation and curtail substantially financial charges which will have positive impact on liquidity and the opportunity to expand our operations in Nigeria,” Puchercos said.