Nigerian manufacturing conglomerate Dangote is to invest ZAR779m in South African cement company Sephaku Cement, increasing its stake to 64%, from 19.8%.
The capital injection followed on Dangot’s initial ZAR350m investment and would fully fund the equity requirement for the South African company’s ZAR3bn, 2.2Mta cement project.
Sephaku Cement is building two new manufacturing facilities, including: the Aganang cement works in North West province and a cement grinding facility at Delmas in Mpumalanga province. Previously, investment firm Sephaku Holdings announced that it had signed a mandate with Nedbank Capital to raise ZAR1.8bn in debt financing for the Sephaku Cement project.
Dangote would provide the necessary guarantees for the debt financing; fund any project overruns up to ZAR265m with a loan on commercial terms; and fund Sephaku Cement’s limestone exploration project in Western Cape and Limpopo province for up to ZAR35m, also with a loan on commercial terms. Sephaku Cement CEO Pieter Fourie said that having completed the early works on site, the company was now well positioned to start the main construction on its projects by the end of July, with completion scheduled for the third quarter of 2012.