The International Finance Corporation has granted BUA Cement a $500 million loan to fund the ongoing expansion of its integrated cement plants in Kalambaina, Sokoto State, Nigeria.
This news was received by Businessworld from the company’s regulatory notice to the Nigerian Exchange Limited. The loan was secured with the IFC serving as lead arranger, along with other lenders such as the African Development Bank (AfDB), Africa Finance Corporation (AFC), and Deutsche Investitions- undEntwicklungsgesellschaft (DEG).
The corporation stated in a statement issued by the company Secretary, Satomi Hauwa: This announcement follows our disclosure dated July 25th, 2022, in which we informed the Nigerian Exchange Limited (the NGX), our esteemed shareholders, and the investing public that BUA Cement Plc (BUA Cement) was considering certain expansion activities and a debt raise of up to $500,000,000.00 from International Finance Corporation (IFC) in its capacity as lead Arranger in collaboration with additional lenders.
In accordance with our disclosure obligations under Chapter 17 of the Rulebook, we are pleased to inform the NGX, our valued shareholders, and the investing public that BUA Cement has reached financial close on the financing to be provided by a syndicate of lending development finance institutions led by International Finance Corporation (IFC), with participation from African Development Bank (AfDB), Africa Finance Corporation (AFC), and Deutsche Investitie.
This facility will be used by BUA Cement to fund the ongoing expansion of its integrated cement plants in Kalambaina, Sokoto State, Nigeria. This was reported by the cement company in a statement signed by Hauwa Garba Satomi, the Deputy Company Secretary.
The business expects that the new facility will allow it raise its capacity from 2.0 million to 8.0 million tons per annum (MTPA).
According to the company, “In furtherance of our disclosure obligations under Chapter 17 of the Rulebook, BUA CEMENT PLC (BUA CEMENT or the COMPANY) hereby notifies the Nigerian Exchange Limited (NGX), its esteemed Shareholders, and the investing public that the Company has entered into discussions with the International Finance Corporation (IFC), serving as lead arranger in conjunction with some other lenders in a syndication pool, to obtain a loan for the expansion of BUA Cement’s factory.
It must include expanding its capacity from 2.0 million tons per annum (MTPA) to 8.0 MTPA, as well as developing other auxiliary utilities (the Expansion Project).” BUA Cement Plc reported a pre-tax profit of N120.1 billion in its 2022 full-year financial results. This marks a 16.79% increase over the N102.87 billion reported by the corporation during the same time in 2021.
Despite inflationary pressures and naira depreciation, the increase in pre-tax profits was attributed to increased sales of Bagged Cement products. The revenue from bagged cement products accounted for 99.46% of the company’s total revenue during the period under revenue.