PPC successfully concludes disposal of 51% interest in CIMERWA, pocket US$42.4 million
THE Johannesburg Stock Exchange (JSE)-listed cement manufacturer PPC has received US$42.5 million for the disposal of its entire shareholding in CIMERWA Plc in Rwanda to National Cement Holding Limited.
The disposal of its 51 percent interest allows the cement firm to focus on its core Southern African markets where it sees opportunities to drive improved profitability and secure a more sustainable return on capital.
In 2012, PPC embarked on a strategy to expand into the rest of Africa, aiming to generate 40 percent of its revenue from outside South Africa by 2017.
The strategy resulted in PPC investing in plants in the Democratic Republic of Congo (DRC), Ethiopia and Rwanda, but significant liquidity problems put severe pressure on its South African balance sheet and led to a restructuring of these investments and a refocus on its southern African operations.
PPC has operations in Zimbabwe.
In a notice to shareholders on Thursday, PPC chief executive officer, Matias Cardarelli, said: “I am pleased with the timely completion of the sale of our stake in CIMERWA. CIMERWA is now part of a regional group that is better placed to support its growth.
“The disposal allows us to focus on our core southern African markets where we see opportunities to drive improved profitability and secure a more sustainable return on capital.”
In a statement, PPC advised shareholders that PPC International Holdings Proprietary Limited has successfully concluded the disposal of its entire shareholding in CIMERWA PLC to National Cement Holding Limited for a cash consideration of US$42.5 million.
“All conditions precedent to the disposal have been fulfilled and the proceeds received. Approval by the Common Market for Eastern and Southern Africa (COMESA) Competition Commission, which is not required before implementation of the Disposal is anticipated to be received within 120 days.
“Consequently, the effective date of the disposal is 25 January 2024. The PPC Group is net cash positive following receipt of the proceeds of the Disposal.”
In December, PPC appointed Cardarellias as the new CEO, taking over from Roland van Wijnen.
Van Wijnen, a Dutch national, joined PPC as CEO in September 2019 following a nearly year-long search to replace Johan Claasen who took early retirement.
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