Habesha Cement (HC) SC plans to float additional shares to reach 30 per cent of the projected US$109m it needs for Development Bank of Ethiopia (DBE) to loan it the rest for the engineering, procurement, and construction (EPC) of its factory, after signing a US$79m deal with Northern Heavy Machinery Industries (NHI) Group on Tuesday, October 26, 2010.
HC plans to sell the shares after its second general assembly, which is expected to approve the sale, to be held in the first week of December, according to management. Since October 2008, HC has sold ETB292m worth of shares, of which 264 million Br has been paid up, out of the ETB600m worth of shares it had floated.
However, the amount is less than the close to ETB523m, 30 per cent of the projected cost for the whole project, which HC is required to show to the DBE for it to loan it the rest. HC stopped selling shares in September 2009. The difference in amount came about after the devaluation of the Birr, according to Mesfin Abi, general manager of HC.
“Before the devaluation, the amount we had to raise to reach 30 per cent of the whole [estimated] project cost was far less,” he told Fortune. “The devaluation was very unexpected.”