Dangote sells $236M stake in cement firm to foreign buyers

Dangote sells $236M stake in cement firm to foreign buyers

Nigeria’s Dangote Industries Limited has sold a 2.3 percent stake in Dangote Cement to foreign buyers in a stock market deal valued at 86.1 billion naira ($236 million).

The stock exchange confirmed the Tuesday’s sale, adding that a total of 416 million shares of Dangote Cement were traded at 210 naira in six off-market deals negotiated between Stanbic IBTC and Meristem stockbrokers, its spokesman said.

Dangote Cement spokesman said the deal was between Dangote Industries Limited and some foreign investors.

Shares of Dangote Cement were exchanged at a 5.5 percent discount to its market price of 222.22 naira on Tuesday.

Dangote Cement, which makes up one third of the Nigerian bourse’s total market capitalisation, shed 0.68 percent on Tuesday, to value it at 3.79 trillion naira ($10.4 billion).

A banking source said Dangote Cement, owned by Africa’s richest man Aliko Dangote and listed on the Lagos bourse in 2010 was yet to meet its minimum float requirement due to its heavy capitalisation which made finding a buyer tough.

Dangote has less than 10 percent free float as against the market’s requirement of 20 percent, the source added.

In 2013, Dangote Industries sold a 1.5 percent of its 95 percent stake in Africa’s biggest cement producer to South Africa’s Public Investment Corporation (PIC) for $289.3 million.

Subsequently it sold a 1.4 percent stake to Sovereign fund Investment Corp of Dubai (ICD) for $300 million in 2014.

The company told Reuters in July it planned to invest about $4 billion over the next two to three years to nearly double its production capacity to 80 million tonnes in Africa.

However it faces competition in Africa from French cement maker Lafarge which has combined its Nigerian and South African businesses to accelerate growth on the continent, as well as other local rivals.

Nigeria’s biggest listed company last week said its half-year pretax profit rose 24.6 percent to 155.58 billion naira ($426.3 million).