CEO and founder of Dangote Industries, Alhaji Aliko Dangote has confirmed that he is looking at acquiring South Africa’s PPC (a cement producing company).
Speaking recently at the Bloomberg Global Business Forum at the Plaza Hotel in New York City, Dangote said the market in South Africa is in need of consolidation, admitting that his bid of PPC is not just a rumor.
Although there are other bidders he still thinks his company should bid sensibly in a way that will benefit the shareholders of both PPC and Dangote Cement. They’ve written to PPC and are expecting response by early next week. Plans are in place to consolidate all the assets together and see how to correct the market.
When asked about raising money through euro bonds for his cement business, he admitted it and said they were simply waiting to clarify certain issues with CBN before it will be properly addressed at the board meeting set to hold in October, 2017.
The attraction is that Eurobonds are easier to handle and the market is liquid. Although he refuted any claims that the company needed the bonds to acquire PPC, saying that 2 banks (unnamed) were ready to fund them 100% throughout the acquisition process.
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He said “the Company is not in desperate need for money unless we want to go for acquisition; you know we have a very healthy balance sheet. Of course, we are owing a bit of money to the parent company which is the major shareholder, but we are not really exposed… our debt ratio is very tiny”.
Dangote is offering PPC not just cash but shares as well as an opportunity to be part of history. Of course, Dangote has already made history, having made it to about 17 African Countries. Dangote still has great aspirations for cement industry. He said: ‘the deficit of infrastructure in Africa is huge and I’m sure the only thing that will sort out the infrastructural deficit is cement”
He also stated that the refinery is still on track. End of 2019 should hopefully see to the commissioning of both the refinery and the petrochemical plant, but the fertilizer will be commissioned first quarter of next year. Anticipations are high for the October Board meeting.
Having recently launched his health care initiative, Dangote said they are doing well in the health sector. Generally, he thinks that though growth is slow in the health sector in Nigeria, we are making progress. “Though we’ve reached the bottom of the cycle, we’ve bounced back because we’ve had very good fundamental for our businesses” he said.