Republic Cement Corp said its stockholders have approved the acquisition of Continental Operating Corp. Continental is the local cement unit of Republic Cement shareholder, Lafarge. Republic Cement said it will finance the purchase with 10-year convertible loan notes that will have a face value of PHP1.35 billion and carry an interest rate of 8 per cent a year.
Lafarge can convert the notes to 1.35 billion common shares in Republic Cement, which - if it chooses to do so - will increase the French company’s stake in Republic Cement to around 22.3%. Lafarge currently owns 239 million shares, equivalent to a 4.13% stake, in Republic Cement.
Republic Cement said the purchase of Continental will increase its total cement capacity to 8.5Mt of clinker a year, the largest in the Philippines. Continental operates cement plants in neighbouring provinces of Manila.