By Gbenga Agbana

Monday, 18 Oct 2010

 

The management of the Nigerian Stock Exchange will on Tuesday October 26, 2010, list, by introduction, 100 million shares of Dangote Cement Plc at N135 per share.

The listing, which will be on a special offer, is sequel to the approval of the merger between Dangote Cement Plc and Benue Cement Company, whereby shareholders of BCC will get one of DCP’s shares in exchange for two of BCC’s shares.

When listed, the enlarged Dangote Cement’s shares will constitute over 25 per cent of the entire market capitalisation of the NSE.

Prior to the listing and special offer, investors who desire to buy into the offer are expected to make their demands through their stockbrokers.

A statement from the company on Saturday, said, ”The management of the new company, Dangote Cement Plc, has promised to make any amount of shares required by investors available on the trading floor of the Exchange on the day of listing.

”The listing, which is the final stage of the merger process, is expected to lift the NSE‘s market capitalisation by about N2.1tn. Following the listing of the new company, shares of BCC will be delisted from the Exchange,” the statement said.

Financial advisers to the merger, Vetiva Capital management Limited and Afrinvest West Africa Limited, said, ”Both set of shareholders will continue to enjoy dividend growth in the coming years, taking into account the earnings growth profile of the post-merger Dangote Cement Plc and the fact that the prevailing 75 per cent dividend payout ratio will be retained.”

A review of dividend history of the companies under the Dangote Group listed on the NSE indicated that in the financial year ended December 31, 2009, investors received over N23bn as dividends.

According to the statement, President, Dangote Group, Alhaji Aliko Dangote, who spoke to shareholders assured them of the benefits from the merger, which he listed to include reduced operational cost arising from improved efficiency and the remaining five years of tax holiday still being enjoyed by some of the component arms of the emergent company.

According to him, ”The proposed merger is conceived with the goal of consolidating the cement producing entities of Dangote Industries Limited in Nigeria under a single entity presenting a robust platform for the enlarged DCP to optimise on available growth opportunities having regard to the present state of the Nigerian cement industry.

”This is expected to significantly increase production capacity, boost turnover and profitability and eventually lead to an enhanced dividend payout and capital appreciation for the investors.

”Our reason for listing any of our companies is to take care of shareholders. So far, we have given dividend of over N23bn this year.”

Going by expected revenue growth arising from the merger, among others, he projected that dividend level for the Dangote Group would increase to between N50bn and N60bn.

Source: Punch