PPC speaks on Zimbabwe subsidiary sale speculation

SOUTH Africa-headquartered cement producer, Pretoria Portland Cement (PPC) says it continues to focus on providing local customers with high-quality cement products to support the development of the country amid reports that the Zimbabwean unit is being sold.

There is growing speculation that the local unit could be sold for about US$200 million, a development that the company could neither deny nor confirm.
In a statement on Wednesday, the giant cement producer said the Zimbabwe unit forms an integral part of PPC’s Southern Africa footprint.

The company explained that it regularly receives unsolicited approaches for various parts of its businesses, including PPC Zimbabwe, from a wide range of parties but would not shed more light on the latest overtures.
“PPC notes the recent media speculation regarding the possible sale of its subsidiary, PPC Zimbabwe. PPC regularly receives unsolicited approaches for various parts of its businesses, including PPC Zimbabwe, from a wide range of parties,” reads part of the statement.

“PPC’s board has a duty to assess any such approaches on their respective merits and in line with its commitment to safeguard and enhance value for stakeholders.
“Any material developments on these unsolicited approaches will be shared with the market via official channels, as required by applicable regulations. PPC Zimbabwe forms an integral part of PPC’s Southern Africa footprint, and the business continues to focus on providing customers with high-quality cement to support the development of Zimbabwe.”

PPC is the dominant producer and supplier of cement products in Zimbabwe with operations in Gwanda, Bulawayo, and Harare where it officially commissioned a US$82 million mega-mechanized plant in the Sunway City area in 2016.
Last year the company revealed that it was now reaping more dividends from this expanded capacity with more business coming from ongoing massive infrastructure projects in the country.

South African mainstream media had earlier reported that PPC’s share price shot up as much as 24 percent at the Johannesburg Stock Exchange (JSE) early this week, taking the company’s market value to R4,8 billion ($274 million).
This was after claims that the group was considering selling its Zimbabwean subsidiary for about US$200m.
One of the established online publications, citing close sources, claimed that the proposed sale could help the company, which was founded in 1892, to focus on its SA operations.

The reports suggested that pricing negotiations were ongoing between PPC and its suitors but indicated that there was no guarantee that a deal will go ahead.
Should the sale materialise, one of the reports stated that the proceeds “would be a significant inflow that can be used to either pay down debt or invest for future growth,” Lester Davids, an analyst with Unum Capital, was quoted as saying.
The group reportedly had R1,5 billion of debt as of last September.-chronicle