BELEAGUERED cement maker PPC says it has bought the Industrial Development Corporation’s 20% stake in Ethiopia-based Habesha Cement Share Company for $13m.
It said its initial 27% stake in Habesha, acquired in July 2012, has now risen to 51%, while the balance of the Ethiopian company is held by more than 16,000 domestic shareholders.
The share price of SA’s largest cement producer rose 0.99% in mid-morning trade on the JSE.
Habesha has begun construction of a 1.4-million-tonnes-a-year facility 35km northwest of the Ethiopian capital Addis Ababa. This will cost about $135m and commissioning of the plant is expected to begin in 2016.
"We are very excited about our increased investment in Ethiopia; a country with a population of 91-million people that is set to reach 100-million by 2018 and has a growth rate that is expected to remain above 8% in the medium term," Bheki Sibiya, PPC’s executive chairman, said on Wednesday.
"This acquisition will provide further momentum to our growth strategy on the continent. PPC has, in addition to the Habesha project, signed engineering, procurement and construction contracts for projects in Rwanda, the Democratic Republic of the Congo and Zimbabwe; all with construction under way," he said.
But PPC’s foray into Africa has been put under severe pressure thanks to the abrupt resignation in late September of former CEO Ketso Gordhan, who had a fallout with fellow directors.
The company said late last month that three shareholders holding 10% of the company’s shares had requested a general meeting to consider the removal of the entire board and the election of persons nominated by these stakeholders.
The board had resolved "in the interest of certainty and transparency" to convene a meeting of shareholders. This was likely to occur in the first half of December. A further announcement would be made when the dates had been finalised, PPC said.
Mr Gordhan has stated that he would return to the position of CEO if shareholders wanted him to.
Foord Asset Management, which said last month it held more than 5% of PPC, has led calls for a new board to be installed to direct the company’s expansion into Africa.
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