The share price of Lafarge Africa Plc has risen to a three-week high following the announcement of its plans to sell its South African unit.
Lafarge topped the gainers’ table on Thursday as its share price gained 9.95 per cent, rising to N10.50 from N9.55 on Wednesday.
The share price maintained its previous price for the most part of the trading session but rose sharply towards the end of trading at about 2:11 pm.
Lafarge announced the proposed sale of 100 per cent of the issued share capital in Lafarge South Africa Holdings Limited to Caricement B.V on Wednesday, saying the subsidiary was faced with an impairment to the tune of N70bn.
It said the value of the consideration was $316.3m, being the sum total of the principal sum of $293m plus all accrued interest of $23.3m as of July 31, 2019.
A statement made available to the Nigerian Stock Exchange on Wednesday read in part, “The board arrived at the conclusion that the disposal of LSAH was the best option for halting the potential impairment.
“The proposed sale is expected to enhance the value of shareholders’ investments, which is of utmost importance to the board. Following the conclusion of the proposed sale, the shareholder loan of $293m will be completely extinguished.”
It added that the transaction would become effective following the receipt of all requisite regulatory approvals and upon the fulfilment of all other conditions precedent as agreed by Lafarge Africa and Caricement.
“From the effective date of the sale, Lafarge Africa will cease to own the 100 per cent equity interest in LSAH, which will be transferred and relinquished to Caricement. Accordingly, from that date, Lafarge Africa will have no obligations or interests regarding LSAH and the accounts of LSAH will no longer form part of Lafarge Africa’s consolidated accounts.”