The realisation of the agreement signed in Baku February 14 between Azerbaijan Investment Company (AIC) JSC and Holcim is nearing completion.
Under the agreement AIC acquires a 10% equity stake in Garadagh Cement (GC) capital for AZN 13.7m.
AIC executive director Anar Akhundov said that they are finishing the last formalities for payment of this block of shares.
“I think we are going to cover our equity stake in GC for period of 5-9 years,” Akhundov said.
On September 18, 2007 the Holcim Group Board of Directors endorsed a EUR300m CG upgrade project. The construction will take about three years.
On January 29, AIC Supervisory Board made an investment decision on the deal. The upgrade and expansion project on the cement factory evaluated at EUR327m is oriented to expand the clinker production capacity from 800,000 up to 1.2Mt and finished cement from 1.3Mt up to 1.7Mt. The project is aimed at diminishing energy consumption by 50% and protecting environment.
The Memorandum on AIC’s joining the GC shareholders ranks was signed on December 7, 2007. The Memo says of acquisition of a 10% stake in GC capital that will allow AIC’s participation in reconstruction of the operating cement factory and construction of a new enterprise.
Azerbaijan’s annual cement demand is 4Mt. And medium-term forecast says of this demand growth up to 7Mta. Holcim still has 79.4% of shares in Garadagh Cement, European Bank of Reconstruction and Development (EBRD) – 10% and the rest belongs to small shareholders. After the deal Holcim is going to keep 69.4%, EBRD and AIC by 10%, and the small shareholders 10.6% of shares. In 2007, the GC enterprise produced 1.34 million tons of cement.