Displaying items by tag: Debts
Kenya: Simon Ole Nkeri, the managing director of East African Portland Cement (EAPC), has been questioned by the National Assembly Trade, Industry and Cooperative committee of the Parliament of Kenya. He told the committee that the company has considered the almost US$14m it owes it workers but he was unable to provide a payment schedule, according to the Business Daily newspaper. In August 2018 the Labour Court allowed the Kenya Chemical and Allied Workers Union to recover the money owed to over 400 workers. In late September 2018 the Court of Appeal gave the EAPC 30 days to make a deposit of the owed funds. However, the cement producer resorted to legal means to delay paying the deposit, as it would ‘cripple’ its business operations.
Egyptian government shuts down National Company for Cement
12 September 2018Egypt: The Ministry of Public Business Sector has shut down the National Company for Cement due to mounting losses. Hisham Tawfik, the Minister of Public Business, said that the plant’s losses had reached Euro43m in the last year, according to Egypt Today magazine. Its creditors include the Gas Company and the Egyptian Electricity Company.
The company’s registration with the local stock exchange was closed in August 2018. The government is now intending to sell its stocks in the Suez Cement Company and Al-Nahda Company. The company’s assets will then be sold. The minister said that workers aged 50 years or more will receive redundancy and that younger workers will be moved to other cement companies.
The cement producer reported mounting losses in recent years due to higher production costs. Reportedly, the cost of producing one ton of cement was 60% higher than the average comparable cost of its competitors. In addition the company was paying its workers twice the average wage than other state-owned businesses.
Kenya: The International Finance Corporation (IFC) is set to take over loans worth US$120m at ARM Cement. UK-government investor CDC Group, which owns a 41% stake in the cement producer, will also loan it US$20m, according to the Business Daily newspaper. The IFC loan is expected by mid-2019 and the CFC loan will arrive by the end of September 2018. The IFC has also proposed a US$50m equity investment in ARM Cement but chief executive Pradeep Paunrana wants to wait until his company’s share price returns to normal to avoid the company being undervalued.
The cement producer reported a loss of US$55m in 2017 due to poor demand in Kenya and Tanzania. It said it was undergoing a ‘significant’ review of its current operations, asset base and financing structure to address its problems.
Nigeria: Lafarge Africa’s chairman Mobolaji Balogun says that the company plans to cut its debts by 2020 before continuing with its expansion programme. In an interview with Bloomberg he said that the cement producer wants reduce its leverage ratio to below 70% from over 100% at present.
The subsidiary of LafargeHolcim wants to take advantage of improvements in the Nigerian economy and a recovery in South Africa to grow its profits. Its total debt recently dropped to about US$600m. Lafarge Africa incurred debt to expand the production capacity at its Calabar cement plant and plans to add more production to plants in the southwest and the north of the country.
Brazil: InterCement is considering listing its European and African operations on a stock market according to sources quoted by Reuters. The move has been discussed with investment banks and could take place in the second half of 2018. InterCement has refused to comment on the story. InterCement’s owner Camargo Corrêa was reported by local media to be looking for buyers for its cement business in 2017 to reduce its debts. Cement sales in Brazil dropped by 6.6% year-on-year to 53.8Mt in 2017.
Democratic Republic of Congo: South Africa’s PPC has agreed with its lenders to reschedule debts from the construction of a cement plant in Democratic Republic of Congo (DRC). The cement producer said that the total capital requirements for the DRC plant will now be limited to interest payments from January 2018 until January 2020, according to Reuters. The debt renegotiation has included an extension of the repayment period by an additional two years and a change to the interest rate.
PPC Barnet DRC is 69% owned by PPC, 21% owned by Barnet Group and the remaining 10% is owned by the International Finance Corporation (IFC). The plant is 60% debt funded by the IFC and Eastern and Southern African Trade and Development Bank.
Dalmia Bharat to bid for Binani Cement
06 December 2017India: Dalmia Bharat Cement has made an agreement with the Piramal Bain Resurgence Fund to jointly bid for Binani Cement. The deal will see the two companies make an offer for Binani’s two plant in Rajasthan, according to the Economic Times newspaper. Binani Cement has debts of US$530m and the potential buyers are aiming to pay around US$930m. Binani Cement became insolvent following a US$110m royalty payment to state government for its limestone quarries. Other Indian cement producers, including Ultratech Cement, Shree Cement, Nirma, JSW cement and My Home Industries, have expressed interest in the cement producer.
Loma Negra files for US$100m initial public offering
07 September 2017Argentina/US: Loma Negra has filed for a US$100m initial public offering (IPO) on the New York Stock Exchange. The subsidiary of Brazil’s InterCement wants to sell shares of Loma Negra in Argentina and New York to raise cash and cut debt, according to sources quoted by Reuters. Proceeds from the offering will be used to reduce debts at InterCement’s parent company Camargo Correa. The Brazilian company originally purchased Loma Negra in 2005 for US$1bn.
India: Jaiprakash Associates has missed interest payments on a non-convertible debentures (NCD) for more than three months. It reported similar defaults on NCDs in April 2017. The indebted cement producer is selling integrated cement plants with a production capacity of 17.2Mt/yr and grinding plants with a capacity of 4Mt/yr to UltraTech Cement.
India: Jaiprakash Associates’ (JAL) US$2.58bn sale of cement plants to UltraTech is likely to be completed by May 2017. Manoj Gaur, the executive chairman of JAL, said that the majority of the payment would be used to pay of debts, according to the Times of India. The cement producer is selling integrated cement plants with a production capacity of 17.2Mt/yr and grinding plants with a capacity of 4Mt/yr.