Pulse.ng logo
Go

Strategy Africa's largest cement producer wants to borrow N150 billion to finance business operations

  • Published:

The company said the loan would be used to finance capital expenditure, working capital and general corporate purposes.

Aliko Dangote has secured a $650 million loan to complete Nigeria’s first private refinery play Africa's largest cement producer wants to borrow N150 billion to finance its operations (DailyTrust)

 

  • Dangote Cement Plc, is planning to raise N150 billion in new debt capital to finance its business operations.

  • The N150 billion debt capital is coming barely a week after the company announced the payment of N178.9 billion cash dividend to shareholders for the 2017 business year.

  • The company said the new capital raising would be done through the issuance of commercial papers.


Africa’s largest cement producer, Dangote Cement Plc, is planning to raise N150 billion in new debt capital to finance its business operations.

A debt capital is a capital that a business raises by taking out a loan. The legal implication is that the interest on debt capital must be repaid in full before any dividends are paid to any equity holders.

Engr Joseph Makoju, Group Managing Director, Dangote Cement Plc, made this known in a regulatory filing on Wednesday, June 27, 2018.

ALSO READ: 6 ways Africa's richest man spends his billions

Makoju said the new capital raising would be done through the issuance of commercial papers, whether as a standalone transaction or by way of a programme to be executed in tranches, series or proportions.

The company said the net proceeds from the issuance would be used to finance capital expenditure, working capital and general corporate purposes.

This is coming barely a week after the approval of the dividend recommendation at the annual general meeting in Lagos where shareholders of Dangote Cement Plc received a dividend per share of N10.50, representing an increase of 23.5% on a dividend per share of N8.50 paid for the 2017 business year.

The Cement company paid a total of N178.9 billion cash dividend to shareholders for the year ended December 31, 2017.

ALSO READ: Dangote Sugar’s Backward Integration Project gulps N121 billion

Similarly, Aliko Dangote, at the AGM, announced that about N121 billion was spent by the company under the Dangote Group for the backward integrated project of the sister's company, Dangote Sugar.

The fund was spent on equipment, land acquisition, compensation to landowners, consultancy and related services.

Also from Business Insider Sub-Sahara Africa: