Displaying items by tag: shareholders
Trinidad & Tobago: The directors of Trinidad Cement have once again advised shareholders to reject an offer by Cemex to buy the company. In a circular to shareholders the cement producer said that the amended offer made by Cemex in early January 2017 was still below the value its auditors had calculated. Cemex previously made an offer to Trinidad Cement in December 2016.
A Game of Cement Companies
18 November 2015People matter in cement companies. Just ask Bruno Lafont, the originally proposed CEO of LafargeHolcim before the merger plans between Lafarge and Holcim changed in mid-2015. Another example is Zhang Bin, the chairman of Shanshui Cement. Some of the shareholders at Shanshui Cement are working hard to remove him. The next attempt has been scheduled for 1 December 2015.
Shanshui Cement, one of the biggest Chinese cement producers, called for the liquidators this week possibly in response. It decided to apply for provisional liquidation after determining that it would default on onshore debt payments due on 12 November 2015. Earlier in the month it had announced doubt whether it could pay its debts.
The scale of this liquidation is monumental for the cement industry. It is broadly similar to a producer at least the size of Dangote going bust. Shanshui Cement is one of China's top ten cement producers. It defaulted on a US$314m onshore debt payment on 12 November 2015.
Based on Global Cement Directory 2015 data, Shanshui Cement is the seventh largest cement producer in the country with 15 cement plants and a cement production capacity of 30.5Mt/yr. Shanshui Cement itself reports that it has a production capacity of 102.6Mt/yr making it the country's fourth largest cement producer. In its 2014 annual results Shanshui Cement reported sales revenue of over US$2.4bn. Its net profit was over US$48m. Sales and profits were down year-on-year in 2014 compared to 2013 and its interim report for 2015 reported the same downward trend. Sales revenue fell by a third to US$793m year-on-year for the first half of 2015. In 2014 its total debt was reported to be US$2.5bn with a gearing ratio of 56.9%, a relatively high figure leaving it vulnerable to decreasing profits.
As the Wall Street Journal and others have reported, the situation has as much to do with corporate politics as it does with over-borrowing. Hot on the heels of Shanshui's liquidation announcement came an offer of help to pay the debts from local rival Tianrui Group if its attempts to change the board of Shanshui were finally successful. Tianrui became the largest shareholder of Shanshui in April 2015 when it increased its stake to 28%. In the process it beat China National Building Material Company and Asia Cement Corporation, who hold 16.7% and 20.9% stakes in Shanshui respectively.
The heart of the Shanshui debacle is the 'key man' clause as reported by Reuters. Borrowing to the company is dependent on current chairman Zhang Bin retaining his position. As soon as he leaves it triggers the repayment of offshore bonds worth US$500m. Normally not due for payment until 2020, the bonds contain a clause that forces the company to sell them within 30 days should Zhang Bin depart.
Shanshui seems likely to be able to pay its debts judging from its sales revenue, assets and the strength of its main shareholders. However, it has chosen to default for the moment. The question for analysts watching this from outside China is whether it masks deeper problems in the Chinese economy as growth continues to slow and industrial overcapacity lingers. Shanshui is the sixth mainland Chinese company known to have defaulted on a bond this year, according to Bloomberg. It's also likely to be operating at a cement production utilisation rate of around 50%.
If the Shanshui Cement situation is more to do with markets than personalities, then it may represent an alarming acceleration of the slowdown of the Chinese economy for the cement industry. If personalities matter more, then the situation is a battle comparable to the politics on the television show 'Game of Thrones.'
Europe: In accordance with Article 20 of the Federal Act on Stock Exchanges and Securities Trading (Stock Exchange Act), LafargeHolcim Ltd was informed by Schweizerische Cement-Industrie-Gesellschaft (Thomas Schmidheiny), Groupe Bruxelles Lambert (Jacqueline Desmarais, André Desmarais, Paul Desmarais Jr, Albert Frère), Eurocement Holding AG (Filaret Galchev-Kaltsidis), NNS Jersey Trust (Nassef Sawiris), Dodge & Cox and Harbor Funds about their number of voting rights and of the registered share capital they hold in LafargeHolcim Ltd as of 15 July 2015. The data is as follows:
- Schweizerische Cement-Industrie-Gesellschaft (Thomas Schmidheiny): 11.872%;
- Groupe Bruxelles Lambert (Jacqueline Desmarais, André Desmarais, Paul Desmarais Jr, Albert Frère): 9.84%;
- Eurocement Holding AG (Filaret Galchev-Kaltsidis): 6.38%;
- NNS Jersey Trust (Nassef Sawiris): 4.97% (3.99% in reg. shares);
- Dodge & Cox: 3.41%;
- Harbor Funds: 1.8609%.
Trinidad Cement fights minority shareholder board nominations
02 October 2013Trinidad: An appeal by Trinidad Cement to challenge an injunction by minority shareholders to block its annual general meeting has been postponed, according to Radio Jamaica News. The hearing was originally scheduled for Monday 30 September 2013.
Trinidad Cement 's annual general meeting on 12 July 2013 was stopped by a high court injunction with just one hour's notice. The injunction was part of legal action by a group of shareholders holding 5.68% of the company who want to nominate five directors to the cement producer's board.