Benue Cement targets rights offer

Benue Cement Company Plc, Nigeria is targeting N6.93 billion from its rights offer of 1.980 billion ordinary shares of 50 kobo each at N3.50 per share. The offer which opened on Monday, November 14, 2005 is expected to close on Wednesday, December 21, 2005. The purpose of the offer, according to the Chairman of Dangote Industries Limited, Alhaji Aliko Dangote, is to enable Benue Cement Company finance the expansion and upgrading of the company’s plant and machinery. Other purpose he said include: “to refinance the import finance facility granted by Intercontinental Bank Plc for the importation of cement manufacturing equipment needed to recommence operation of the factory and provision of working capital for the company.”

He stated that the net proceeds of the offer amounting to N6.661 billion after deducting the total cost of the issue which is estimated at N268,240,850.00 will be utilised for the purposes stated above and in the following  proportions: Part financing the expansion and upgrading of plant and Machinery (22.24 per cent) N1.495 billion; Debt refinancing (67.55 Per cent) N4.500 billion and Provision of working capital (10 per cent) N661,175,915. While stating the mode of subscription, he said “An existing shareholder has the rights to subscribe for four new shares for everyone already held.”

Reviewing the operations and future plan of the company he said:  “Following the temporary closure of the plant last year to review and restructure our operations, we have resumed operations  properly focused and positioned. Our vision and plan is to increase the company’s present production capacity from 900,000t to 2.7Mta. We plan to increase our sales to a minimum of 2.2Mta by year 2007.” He stressed that the engineering upgrade is ongoing and contract awards for the structural steel fabrication of auxiliary units have been completed. According to him “the repair of one of the existing plant has been done and production commenced in March 2005. An order has also been placed for generating sets in order to increase the power supply to a production capacity of 53 megawatts (MW). This is to enable us meet our production target without hindrance. We have since received one of the generating sets.”