Lafarge puts gypsum division up for sale
Lafarge Group has launched the sale of its gypsum business, according to a report in the Financial Times. A successful sale could raise at least €1bn ($1.45bn) which would be used to cut the cement major’s €16bn debt burden.
Prospective buyers received information brochures earlier in the week and a number of interested parties have already made themselves known, with KKR, Advent reportedly in the running.
The sale is expected to generate EUR1bn (USD1.4bn) although some market sources stated that the European branch alone could fetch about EUR 900 million. However, the loss-making North American unit is considerably less attractive and Lafarge may have to split the operations, which cover 70 countries.
Last February, Lafarge cut its dividend by 50 percent and pledged to reduce debt by at least EUR2bn this year. Nevertheless, Lafarge subsequently saw its credit rating lowered to junk status for the first time in its history by Standard & Poor, raising the cost of borrowing and forcing it to reconsider its debt reduction strategy.
Chief executive Bruno Lafont has pledged to win back the investment grade rating and Lafarge is now expected to dispose of other non-core assets as it seeks to reduce its debts. Published under Cement News
