Dangote Sells $350m Stake In Cement Firm To Foreign Investor

(Sundiata Finance) – Dangote Cement on Monday sold 550 million shares worth $350 million at N225.7 each to the African Fun of a foreign investment company, in a one-stock market deal.
The deal was between seller Meristem Stockbrokers Ltd standing as an intermediary for Dangote and buyer CSL Stockbrokers Ltd who also stood as an intermediary for an African fund of a foreign firm.
The reason for the sale was to boost the company’s free-float of 15 per cent above the regulatory benchmark of 20 per cent, a source told BusinessDay.
In 2010, the bourse waived its free float requirements because it wanted to encourage more companies to list on the stock exchange and it gave Dangote Cement 18 months to reach the 20 per cent level.
Research carried out by BusinessDay reveals that in 2013, Dangote Industries sold 1.5 per cent of its 95 per cent stake in Dangote Cement to South Africa’s Public Investment Corporation for $289.3m.
Subsequently, it sold 1.4 per cent stake to Sovereign Fund Investment Corp of Dubai for $300m in 2014.
In August 2017, Dangote Industries Limited sold 2.3 per cent stake in Dangote Cement Plc to foreign investors in a stock market deal valued at $236 million, and last month it sold another 128 million units of its stake in Dangote Cement Plc valued at N27billion at N210 per share to Dubai based foreign investors.
“It shows that foreign investors see value in the company ’stocks and we know, about 50 per cent of our transactions are from foreign portfolio managers and it also allows retail investors and local Nigeria funds to continue to have Dangote cement in their portfolio,” said Dolapo Ashiru, CEO Mega Capital Financial Services Limited.
“Dangote cement is no longer a Nigerian cement company but a pan African cement company in at least 14 African countries and foreign investors are aware of the fact that the company is the stock for the future and betting on Africa’s infrastructure boom,” Ashiru said.
Dangote Cement Plc with shares outstanding of 17,040,507,405 units and a market capitalisation of N3.9 trillion or 30 percent of the bourse is Nigeria’s largest listed company.
As at Monday December 18 2017, Dangote cement traded at N230 per share and has returned 42.35 per cent in the past year.

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