BUA Cement Plc Bond Issuance Now Open

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Tuesday, December 15, 2020 / 3:16 PM / By Stanbic IBTC Stockbrokers / Header Image Credit: BUA Cement 


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We are pleased to inform you that the book build for the BUA Cement PLC ("BUA Cement" or the "Company") Series 1, up to NGN 100 billion 7-year Fixed Rate Senior Unsecured Bonds, under its NGN200 billion Debt Issuance Programme opens on Tuesday, 15 December 2020 and will close on Monday, 21 December 2020

 

BUA Cement was formed as a result of the merger between CCNN PLC and Obu Cement Company PLC and is the third most capitalized company on the Nigerian Stock Exchange. BUA Cement is a fully integrated cement manufacturer, with 3 modern factory lines across two States. BUA Cement has an installed capacity of 8 million metric tonnes and is the largest cement producer in the North-West, South-South and South-East regions of Nigeria. Despite the breakout of the COVID-19 pandemic, the Nigerian cement sector has recorded increased profitability given the infrastructure deficit in the country. Nigeria's per capita cement consumption of 109kg is below global average of 521kg. BUA Cement reported a 21% and 24% year-on-year growth in revenue and profit after tax respectively as at September 2020 which is consistent with growth in prior years. The Company's EBITDA margin of 46.4% for the same period is one of the highest amongst listed corporates on the NSE. BUA Cement is a lowly geared company with debt to equity ratio at 0.3x and debt service ratio of 4.3x.

 

The Company expects to sustain growth by unlocking added synergy benefits, increasing foothold on existing and into new markets whilst consolidating its' current market share, and implementing lower cost energy mix across plants. BUA Cement is looking to launch a debut offering in the bond markets and plans to utilize proceeds of the bond issuance to refinance a shareholder loan, fund a debt service reserve account and for working capital purposes.

 

Please see terms of the offer below;

Issuer:

BUA Cement PLC

 

Issuing Houses:

Stanbic IBTC Capital Limited, UCML Capital Limited and Tiddo Securities Limited

 

Programme Size:

NGN200 billion

 

Issue Size:

Up to NGN100 billion

 

Description:

Series 1 Fixed Rate Senior Unsecured Bonds

 

Issuer Rating:

AA- (DataPro); A (Agusto)

 

Issue Rating:

AA- (DataPro); A (Agusto)

 

Book Building Price Guidance

7.00% - 7.50%

 

Tenor:

7 years

 

Par Value / Issue Price:

 

NGN1,000 per unit

100% of Par Value

 

Offer Open / Open Close:

 

Tuesday, 15 December 2020

Monday, 21 December 2020

 

Day Count Fraction:

 

Actual / Actual

 

Offer Mode:

Offer for Subscription via Book Build

 

Coupon Basis:

Fixed Rate, semi-annual

 

Units of Sale:

Minimum of NGN10,000,000 (10,000 units at NGN1,000/unit) and multiples of NGN1,000 thereafter

 

Redemption / Payment Basis:

Principal repayments to be amortised evenly as from start of year 4, following a 3-year moratorium

 

Call Option:

The Issuer will have the right to exercise a Call option to effect early redemption of the Bonds, either in part or in whole, as from the expiration of 48 months from the Issue Date

 

The Bonds will be called at par (100% of Issue Price)

 

Listing:

FMDQ Securities Exchange and/or The Nigerian Stock Exchange

 

Use of Proceeds:

Refinance shareholder loan, fund debt service reserve account and for working capital purposes

 

 



Proshare Nigeria Pvt. Ltd. 


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