JOHANNESBURG - PPC Limited has completed the sale of its 51% stake in Rwandan cement producer Cimerwa to National Cement Holding Limited for a cash consideration of $42.5 million. The deal is a significant step in PPC's strategic shift to focus on its Southern African operations and improve its financial leverage.
The share transfer is set to take place seven business days after the necessary conditions are met, including notifications and clearances from the Common Market for Eastern and Southern Africa (COMESA), Rwanda Revenue Authority, and Cimerwa’s banking partners, as well as a non-objection from the Rwanda Stock Exchange regarding an off-market sale agreement.
Cimerwa, which reported a net asset value of R1.2 billion and a net profit after tax of R237 million for the fiscal year ending March 31, 2023, has been a profitable venture for PPC, reflected in its book value of $38.5 million. The transaction is supported by a corporate guarantee from National Cement Company Limited within the Devki Group and includes customary warranties.
The sale aligns with PPC’s capital allocation priorities that emphasize maximizing shareholder returns. It is classified as a category 2 transaction according to the JSE Listings Requirements, which means it does not require shareholder approval but will impact PPC's capital management strategy.
National Cement's parent company, Devki Group, will now spearhead Cimerwa’s growth initiatives in Rwanda and East Africa, with a particular focus on supporting infrastructure development. Regis (NYSE:RGS) Rugemanshuro from Cimerwa expressed gratitude towards PPC for their past contributions and showed optimism about the future under new ownership. Dr. Narendra Raval of Devki Group reiterated their commitment to contributing to the region's economic development through this acquisition.
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