Lafarge Africa 2018 Rights Issue - To Accept or Renounce?

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Wednesday, December 18 2018 / 02:00 PM / Proshare Research   

 

Lafarge Africa Plc, on Monday December 17, 2018, announced the commencement of its 2018 Rights Issue. The offer has been approved by The Securities and Exchange Commission (SEC). 

Lafarge Africa is to raise N89.2 billion by way of a Rights Issue of 7,434,367,256 shares at N12.00 per share, by issuing 6 new shares for every 7 shares held by shareholders as at 4th December, 2018. 

The Rights Issue is being undertaken to enable Lafarge Africa restructure both its foreign and domestic loans as well as improve its working capital.

 

Thus, the following is expected to take place with the proceeds of the Issue;

(i)          repayment of part of the company’s foreign currency denominated shareholder loans; - US$22.2m, representing part payment of the FCY Loan of US$315.2m will be repaid. 

(ii)             repayment of the company’s short-term local debt obligations and 

(iii)           providing working capital support for its ongoing operations.

 

The estimated net proceeds of N87,874,399,106 - following the deduction of the estimated offer costs of N1,338,007,966 will be applied as stated below:

 

Graph 1: Use of Proceeds

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Source: Lafarge Africa Rights Issue Circular, Proshare Research

 

A look at the six-year annual high and low market prices of the company reflects the fact that the highest price of Lafarge in the last six years was N119.09 which was recorded in 2014 while the lowest price of the stock was N11.85 in 2018. The Rights Offer price of N12.00 is 1.3 % above the Company’s lowest price on the Nigerian Stock Exchange in 2018.

 

Graph 2: Six-Year Annual High and Low Market Prices

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Source: Lafarge Africa Rights Issue Circular, Proshare Research 

 

How to participate 

The Rights Offer is open to all existing shareholders of Lafarge Africa, and shareholders can invest in the new Offer through their respective stockbrokers. The Offer Opened on Monday 17 December, 2018 and closes on Wednesday 23 January, 2019.

 

Visit Lafarge Africa Plc IR Page in Proshare MARKETS


 Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


Download – Lafarge Africa Plc 2018 Rights Issue Circular

 

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