By Aliyu Galadima 

BUA Cement has secured $500m loan from the International Finance Corporation to compete with arch rival Dangote Cement.

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 – ndEntwicklungsgesellschaft (DEG).

BUA disclosed in a regulatory filing that the debt would help finance the ongoing expansion of its integrated cement plants in Kalambaina, Sokoto State, Nigeria.

BUA said injecting the $500m in the plant would raise its capacity to 8 million tonnes per annum

This expansion will enable BUA Cement to remain competitive against its market rivals, Dangote Cement, owned by Aliko Dangote, and Lafarge Cement.

The loan will be disbursed to finance the ongoing expansion of its integrated cement plants in Kalambaina in Sokoto State to 8.0 MTPA capacity and as well as facilitate the development of other ancillary utilities.

The document reads: “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 pursuant to 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.”

Recall that the duo ie Dangote Sugar and BUA Foods had collectively proposed N99.22 billion dividends for 2022 subject to approval by shareholders

In its 2022 financial report, BUA Foods said its shareholders are expected to earn N81 billion as a return on investments following the proposal of N4.50 kobo per share as a dividend payment.

Investors holding BUA Foods shares were paid N63 billion in 2021, indicating that the dividends would increase by N18 billion in just one year if approved by the board.

In a statement announcing the proposed dividend on Wednesday, BUA Foods said: “The Board of Directors (“the Board”) recommends for the approval of shareholders a payment of N4.50k dividend per 1 ordinary share of 50 kobo each, out of the profits declared in the financial year ended 31 December 2022 (2021: N3.50k dividend per 1 ordinary share of 50 kobo each).

“If approved, dividends paid to shareholders will be subject to the deduction of withholding tax at the appropriate rate at the time of payment. The N3.50k dividend per 1 ordinary share of 50 kobo each, declared in 2021, was paid in 2022.

“A Final Dividend of ₦4.50 per ordinary share of 50 Kobo each, subject to appropriate withholding tax and approval, will be paid to shareholders whose names appear in the Register of Members as at the close of business on 1st September 2023.

“On 21st September 2023, dividends will be paid electronically to shareholders whose names appear on the Register of Members as of 1st September 2023 and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.”

On its part, Dangote Sugar offered shareholders N18.22 billion on N1.50 kobo per share as dividends.

Dangote Sugar’s shareholders were compensated for their investments with N12.14 billion as dividends the previous year.