Sephaku signs mandate with Nedbank Capital

Sephaku signs mandate with Nedbank Capital
Published: 09 March 2010

New entrant in the South African cement market, Sephaku Cement, has appointed Nedbank Capital as lead arranger of the ZAR1.8bn project finance facilities required for the development of the company’s new Aganang and Delmas cement projects.

The company, in which JSE-listed Sephaku Holdings owned a 80.2% interest, would be spending R3,3-billion on the construction of a 2.2Mta cement facility, near Lichtenburg, in North West province, and a 1.2Mta grinding facility in Delmas, in Mpumalanga province.

Sephaku Cement CEO Pieter Fourie commented in a statement on Monday that the arranging mandate with Nedbank Capital paved the way for funding the construction of these two plants, which would be completed by the third quarter of 2012.

The balance of the ZAR3.3bn would be financed through equity that has already been raised, as well as equity still to be raised from local and global investors.

Nigerian cement producer Dangote Cement had invested R350-million in Sephaku Cement to allow for the construction of the two new plants. Sephaku Cement was also in “advanced negotiations” with a global financial institution for a possible equity investment of R300-million.

The cement producer had already entered into a full turnkey construction contract with Chinese cement plant supplier, the Sinoma International Engineering Company, on a fixed price basis.

Construction on both plants was expected to start within the next few months. Once completed in 2012, the plants would ramp up to full production over a period of eight months in line with cement sales.