By Alois Vinga
LISTED cement manufacturer, Lafarge Cement Zimbabwe (LACZ) has entered into a binding agreement for the disposal of its 76,45% stake to Fossil Mines Private Limited.
The development follows months of negotiations with different suitors who were bidding to acquire the stake.
In a statement Tuesday, LACZ acting company secretary Arnold Chikazhe informed stakeholders that “Further to the cautionary announcement dated 31 May 2022, shareholders and members of the investing public are advised that Associated International Cement Limited, a member of the Holcim group, has entered into a binding agreement for the sale of its 76.45% stake in Lafarge Cement Zimbabwe Limited to Fossil Mines (Private) Limited”.
He added: “The transaction, if successfully concluded, may have a material effect on the Company’s securities. Accordingly, shareholders and members of the investing public are advised to exercise caution when dealing in the Company’s securities until a full announcement is made”.
The disposal of Holcim’s Zimbabwean shareholding follows prior disposals of Holcim shareholding in the Northern Ireland, Zambian and Malawian markets amid plans that the group is in the process of disposing its Indian cement business.
On 25 January 2022 the group announced the intention to dispose of their 76,45% shareholding in LACZ as part of their strategy to divest from the cement manufacturing business before inviting interested bidders to submit their expressions of interest to its Financial Advisors, ABSA Corporate and Investment Banking in South Africa.
Internal documents seen by NewZimbabwe.com Business show that Fossil’s offer is backed by local banks, pension funds and wealth managers.
Fossil engaged local Financial Advisors, and Commercial Attorneys to act on its behalf on the bid as well as Cliff, Decker and Hofmeyer of South Africa to act as its Transaction Advisory Team.
“As part of evaluating the bids Holcim invited the bidders to South Africa for negotiations. The final round of negotiations between Holcim and Fossil took place in South Africa from 28 May 2022 to 30 May 2022 wherein Fossil’s offer to acquire 76,45% of Lafarge Zimbabwe was accepted,” the documents said.
However, the transaction is still pending due to further due diligence of the asset and regulatory approvals.
“Should Fossil takeover Lafarge, the planned strategy is to maintain Lafarge as a Listed business and also recapitalize Lafarge leading to an increase in the cement output from the plant.
“Currently, 40% of Zimbabwe’s cement requirements are imported, an opportunity that Fossil wants to capitalize on by providing the market with readily available cement,” added the documents.