The board of Lafarge Africa Plc board of directors has approved and authorized the company to undertake business combination/ merger with the United Cement Company of Nigeria (Unicem) Limited and Atlas Cement Company (Atlas).
Daily Times recalls that in order to reduce its exposure to adverse foreign currency translation losses as experienced in 2016, shareholders of the company at its AGM, which held in June, approved a Rights Issue of N140 billion.
The board’s scheme of merger approval which was contained in a statement from the company titled” Lafarge Africa Plc –Scheme of Merger/press release “dated 4th August 2017, signed by the company’s secretary, Mrs. Edith Onwuchekwa, and was published by the Nigerian Stock Exchange (NSE) recently.
The company revealed in the statement that the board also empowered the management of Lafarge Africa to also enter into any agreement and to do all that is necessary to negotiate and implement the merger among Unicem, Atlas and the company.
The company through the board’s mandate has been empowered to seek the endorsement of the Securities and Exchange Commission (SEC) and all other relevant regulatory bodies, in furtherance of the implementation of the merger.
Meanwhile, Lafarge Africa reporting a profit of N20b for the half year ended June 30, 2017, from a loss position of N30billion in the corresponding period of 2016, the merger provided ample opportunity for cost maximization, synergy and boost in bottom line and increase returns on investment.
The company ended 2016 with a full year a profit after tax (PAT) of N16.898b, showing a decline of 38 per cent from N27.163b in 2015. Lafarge Africa would have ended the year with loss before tax of N22.818b compared with a profit before tax of N29.286b.
However, a N39.717 billion tax credit, which came mainly from deferred tax assets’ generated from Unicem operations, enhanced its PAT to N16.898b for 2016.
But going by the half year results ended June 30, 2017, Lafarge has turned the corner and is set to make profit at the end of the financial year and deliver higher returns to shareholders.
The unaudited results released to the Nigerian Stock Exchange (NSE) last week, showed a revenue of N154.8b, indicating an increase of 44.2 per cent from N107.3b in 2016.
Cost of sale grew by 19.7 per cent from N92.2b to N110b, while sales and marketing expenses followed same uptrend to hit N2.12b, from N1.98b. Administrative expenses rose from N10.23b to N16.3b.