Lafarge Said to Attract Cement Bids for Pakistan Assets
Potential acquirers have submitted bids to the Paris-based company for Lafarge Pakistan Cement Ltd. that reported a record profit in the nine months ended Sept. 30, the person said, asking not to be identified because the matter is private.
The world’s second-biggest maker of the construction material is selling assets across the globe to reduce costs and repair a credit rating that has fallen one level below investment grade. Lafarge’s plant in the Punjab province has a capacity to produce 2.5 million tons a year and will help the buyer tap sales as Prime Minister Nawaz Sharif’s government increases spending on infrastructure projects.
“Cement demand is expected to pick up as Sharif is known to spend on dams and motorways,” said Muhammad Imran who helps manage 45 billion rupees ($450 million) in stocks and bonds as portfolio manager at NBP Fullerton Asset Management Ltd. in Karachi.
Christel des Royeries, a spokeswoman for Lafarge, said she won’t comment on the matter. Muhammad Faisal, chief financial officer for Lucky Cement, also declined to comment.
Lafarge CEO Bruno Lafont said in February he’ll continue to make “selective” divestments after the company recently sold 380 million euros ($526 million) of assets, including a stake in a gypsum business.
Lafarge Pakistan rose 0.6 percent to 11.24 rupees in Karachi yesterday giving it a market value of 14.8 billion rupees. Shares have risen 34 percent this year, compared with a gain of 8 percent in the benchmark Karachi Stock Exchange 100 index, making it the second-highest gainer among cement stocks in Pakistan.
Pakistan’s cement sales rose 2 percent to 21.7 million tons in the eight months ended Feb. 28, the highest level in four years, according to data compiled by IGI Securities Ltd. in Karachi.
Islamabad-based Lafarge Pakistan reported its highest ever profit of 903 million rupees in the nine months ended Sept. 30, according to its third-quarter report. Karachi-based Lucky Cement, that has the capacity to produce 7.75 million tons a year, ships the building material to several countries in Mozambique, Sri Lanka and Afghanistan.
Lafarge owns about 73 percent of the Pakistan unit by indirect holdings in Pakistan Cement Holding Ltd. and Camden Holding Pte., according to company’s annual report.
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