To boost the company’s liquidity ration, Lafarge Africa Plc has listed bond on the Nigerian Stock Exchange (NSE) on Friday.
Lafarge Africa Plc had earlier tendered an application for a three and five year capital raising measure through bond of N26.4 billion and N33.6 billion respectively.
According to the NSE, the company through a three year fixed rate bond due 2019, will raise N26,386,000,000 in its first series of a N100 Billion Debt Issuance Programme and will also offer for Subscription N33,614,000,000 in Series II of a five year Fixed Rate Bond Due 2021 under a N100 Billion Debt Issuance Programme.
Lafarge named Pilot Securities as the stockbrokers, while Chapel Hill Advisory Partners Limited; Standard Chartered Capital and Advisory Nigeria Limited and Stanbic IBTC Capital Limited as the issuing houses and financial advisers for both debt programmes.
This debt programme is however coming on the heels of a successful conclusion of its Series I and II N60 billion Bond Issuance.
In June, Lafarge listed on the FMDQ OTC Exchange, a three year 14.75 percent Bond due 2019 ( Series 1 Bond) and N33.614 billion five year 14.75 per cent bond due 2021 (Series 11 Bond), with the proceeds of the bond issuance used to part-refinance the debt of its wholly-owned subsidiary, United Cement Company of Nigeria Limited.
According to the company, the dual-series issuance, the first of its kind and largest ever bond issuance by a corporate in Nigeria’s debt capital markets, was concluded through book building with the order book oversubscribed.
Group Managing Director/CEO, Lafarge Africa, Mr Michel Puchercos, earlier this year, had however noted that the company is looking to refinance third party USD denominated loans of $85 million by end of fourth quarter (Q4).
According to him, the company expects pricing to remain robust during Q4 with significant recovery in Q4 vs Q3 2016 and operating EBITDA around 30 percent
“Our focus on volume and prices started to deliver during the third Quarter. In September, all our plants were running at record performance level, Mfamosing Line 2 started its operation on August 28th (clinker) and prices increased by 650N/bag in September representing above 40 per cent price change.
“In spite of the recessionary economic environment and market uncertainties, our company is positioned to deliver improved performance going forward. Our immediate objective is to optimize our processes, reduce operational costs and deliver strong EBITDA margins. However, uncertainty remains on the macroeconomic environment and its effect on the cement market.”
The Chief Executive Officer of the company, Bruno Bayet, while speaking with Nigerian Tribune noted that the listing of the bonds provides for more liquidity, visibility.
“It is good for the company, it is good for the investors and the bond holders.”