The senate has endorsed the proposed $1 billion acquisition of Lafarge Africa Plc by Hainan Huaxin Pan-African Investment Company Plc, a Chinese company.
The senate stated that the transaction will not affect the
16.19 percent equity held by Nigerian investors.
The upper legislative chamber approved the transaction on
Thursday after adopting the report of its ad hoc committee chaired by Abba
Moro, senate minority leader.
The committee was constituted seven months ago to
investigate the proposed sale by Holcim AG, the Swiss building materials
company, following concerns about Lafarge Africa’s ownership structure and the
implications of the deal.
Presenting the report, Moro said the committee engaged
relevant stakeholders and found no legal impediment to the acquisition.
He recommended that the senate allow the transaction to
proceed, subject to strict compliance with Nigerian laws and continued
regulatory oversight.
“The senate allowed the transaction process concerning the
sale of Lafarge Cement Company Plc to Huaxin to scale through,” he said.
“However, all due processes and strict compliance with all
Nigerian extant laws on the subject must be followed and adhered to strictly
for a hitch-free transaction and transition process.”
The committee also urged regulatory agencies, including the
Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC),
Federal Competition and Consumer Protection Commission (FCCPC), Nigerian
Investment Promotion Commission (NIPC) and Bureau of Public Enterprises (BPE),
to maintain rigorous oversight of the transaction.
The committee further recommended that the new investors
strengthen their corporate social responsibility (CSR) programmes in host
communities.
According to the report, public concerns over the
transaction stemmed largely from the misconception that Lafarge Africa is
wholly Nigerian-owned.
The committee said the proposed acquisition represents the
transfer of ownership from one foreign investor to another because Holcim, the
company’s majority shareholder, is divesting its stake to another foreign
investor.
It added that the transaction would not diminish or alter
the rights of Nigerian shareholders, whose 16.19 percent equity stake in the
company would remain intact.
The committee also said relevant regulatory agencies found
no evidence that the acquisition breached Nigeria’s legal or regulatory
framework or posed any immediate threat to national security.
The committee added that Huaxin had committed to injecting
fresh capital into Lafarge’s operations in Nigeria and across Africa, a move
expected to strengthen the company’s operations, stimulate industrial growth
and support foreign direct investment.
The report further noted that Lafarge controls about 18
percent of Nigeria’s cement market and that the acquisition would not
significantly alter competition in the industry.
It said the FCCPC had received assurances from the acquiring
company that there would be no staff retrenchment during the transition.
NINGI QUERIES OWNERSHIP STRUCTURE
During debate on the report, Abdul Ningi, senator
representing Bauchi central, questioned the ownership structure presented by
the committee.
Ningi said the report disclosed that Nigerian interests,
including the federal government and public investors, own about 16 percent of
Lafarge Africa, while Holcim controls 18 percent.
He said the report failed to explain who owns the remaining
66 percent of the company’s shares.
“I would have imagined that the report of the committee
should specifically give us the shareholding structure,” he said.
“Nigerians have about 16 per cent, Lafarge has 18 per cent.
Who owns the remaining 66 per cent? We need to understand where we are coming
from.
“It is only when we know who owns the remaining shares that
we can determine whether Nigerians are actually benefiting from this
transaction.”
Ningi also said the transaction did not involve the sale of
a strategic Nigerian asset but rather the transfer of ownership between two
foreign companies.
“There is a misconception about the ownership of Lafarge,”
he said.
“The current development is basically the transfer from one
foreign ownership to another. Lafarge is a foreign company transferring its
shares to another foreign company.
“I would have expected the committee to point us to the
specific provisions of Nigerian law that permit such a transfer and to clearly
state the ownership structure before asking us to approve the transaction.”
Osita Izunaso, chairman of the senate committee on capital
market, and Shuaib Salisu, senator representing Ogun central, also backed the
committee’s recommendations.
The senate subsequently adopted the report, effectively
giving legislative backing to the transaction.
BACKGROUND
The senate’s endorsement comes months after its committee on
capital market opened an investigation into Holcim Group’s planned divestment
of its 83.81 percent stake in Lafarge Africa.
During the probe, SEC said it had not received any formal
filing on the proposed sale, adding that it had only been notified of an
internal restructuring within Holcim.
The BPE also told lawmakers that the shares being divested
belonged to Holcim and did not affect the 16.19 percent equity held by Nigerian
investors.
Following the briefing, the senate committee summoned
Lafarge Africa’s management and sought further details from the CAC as part of
its review of the transaction.
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com