BUA Cement gets $500m loan from IFC to expand its integrated cement plants

BUA Cement has secured a $500m loan from the International Finance Corporation to finance the ongoing expansion of its integrated cement plants in Kalambaina, Sokoto State, Nigeria.

This was contained in the company’s regulatory notice to the Nigerian Exchange Limited and obtained by Nairametrics.

The loan was secured through the IFC as lead arranger alongside other lenders including the African Development Bank (AfDB), Africa Finance Corporation (AFC), and Deutsche Investitions – undEntwicklungsgesellschaft (DEG).

According to a statement signed by the company Secretary, Satomi Hauwa, the company said:

“This announcement is further to our disclosure dated 25th July 2022, wherein we informed the Nigerian Exchange Limited (the NGX), our esteemed shareholders, and the investing public that BUA Cement Plc (BUA Cement) was considering engaging in certain expansion projects and a debt raise of up to Five Hundred Million US Dollars ($500,000,000.00) from International Finnane Corporation (IFC), in its capacity as lead Arranger in conjunction with other lenders.

We are pleased to inform the NGX, our esteemed shareholders, and the investing public, in line with our disclosure obligations under Chapter 17 of the Rulebook, that BUA Cement has achieved financial close in connection with 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 Investitions – undEntwicklungsgesellschaft (DEG).

BUA Cement intends to utilize this facility to finance the ongoing expansion of its integrated cement plants in Kalambaina, Sokoto State, Nigeria.
The expansion will increase the plant’s capacity to 8.0 MTPA and as well as facilitate the development of other ancillary utilities”.

What you should know

Nairametrics had reported that BUA Cement was in discussion 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 integrated cement plant in Kalambaina, Sokoto State, Nigeria.

The cement company revealed this in a disclosure signed by Hauwa Garba Satomi, the Deputy Company Secretary.

The company believes that the new facility will help to increase its capacity from 2.0 million tons per annum (MTPA) to 8.0 MTPA.

It company stated, “In furtherance of our disclosure obligations under Chapter 17 of the Rulebook, BUA CEMENT PLC (BUA CEMENT or the COMPANY) hereby notifies Nigerian Exchange Limited (NGX), its esteemed Shareholders and the investing public that the Company has gone into a discussion 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 integrated cement plant in Kalambaina, Sokoto State, Nigeria.
It shall include increasing its capacity from 2.0 million tons per annum (MTPA) to 8.0 MTPA, and the development of other ancillary utilities (the Expansion Project).”
BUA Cement Plc has released its 2022 full-year financial statements, reporting a pre-tax profit of N120.1 billion.

This represents a 16.79% increase from the N102.87 billion the company reported during the same period in 2021.

The growth in pre-tax profits was due to the increase in sales of Bagged Cement products despite inflationary pressure and depreciation of the naira.

The revenue from bagged cement products accounted for 99.46 % of the total revenue achieved by the company during the period under revenue.