Dangote Cement Plans London Share Sale in Bid to More Than Double Output
Dangote Cement Plc (DANGCEM), Nigeria’s biggest company by market value, plans to raise funds in a London share sale before the end of 2012 as it moves to more than double output in two years, Chairman Aliko Dangote said.
The Lagos-based company plans to invest $3.9 billion over the next 28 months to boost cement output to 50 million metric tons by 2013 from an estimated 20 million tons this year, Dangote said today in an interview in Cape Town, where he is attending the World Economic Forum on Africa.
The cement maker will sell global depositary receipts in London before the end of next year to raise funds to help expand the business, Dangote said, without giving details of how much it plans to raise from the share sale. The company will probably seek between $3 billion and $5 billion, two people with knowledge of the sale told Bloomberg News on Dec. 6.
“We have a major infrastructure deficit in Africa,” Dangote said. “In Nigeria, we have an 18 million-homes deficit. This will continue to grow because growth in population in Nigeria is 3 percent per annum. Definitely, we need cement to drive that growth.”
Growth in Nigeria, Africa’s most populous nation of 150 million, will fuel most of the demand for cement in coming years as the need for housing and infrastructure projects climb, Dangote said. Nigeria, Africa’s largest oil producer, is forecast to expand 6.9 percent this year, according to the International Monetary Fund.
Dangote Cement shares rose the most in more than a week today, climbing 1.9 percent to 123.51 naira as of 12 p.m. in Lagos, giving the company a market value of 1.9 trillion naira ($12.3 billion).
The company’s expansion plans will focus now on sub-Saharan Africa, Dangote said.
“Right now our own area of business and focus is Africa,” he said. “We are not indebted, and have a lot of room to expand. We are looking at organic growth first and if there’s any opportunity outside Africa that will be secondary. We’ll look at it on merit.”
To contact the reporter on this story: Nasreen Seria in Cape Town via at nseria@bloomberg.net.
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.
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