Afrisam Seeks Expansion in Africa After Debt Reduction Program

Afrisam Ltd., a South African cement maker majority-owned by the Public Investment Corp., plans to expand in the rest of Africa after overhauling its debt, Chief Executive Officer Stephan Olivier said.

“The company is currently exploring new growth opportunities in a number of countries,” Olivier said in an e-mailed response to questions from Bloomberg yesterday. “These will be announced upon finalization.”

Afrisam’s Tanzanian unit, Tanga Cement Company Co., plans to add a second kiln and output will double, “allowing it to meet increasing demand in the East African market which is experiencing rapid economic development,” Olivier said. The Johannesburg-based company, which has operations in South Africa, Lesotho, Botswana and Swaziland, targets a 9 percent increase in production this year.

Afrisam agreed on a debt reduction of more than 15 billion rand ($1.6 billion) with euro-denominated floating rate notes settled through an injection of equity from PIC and investment company Pembani Group.

“The company has not issued bonds,” Olivier said. “It has secured private long-term funding from domestic banking and financial institutions.”

The PIC, a state-owned company managing assets of about 1.2 trillion rand including government employee pension funds, owns 66 percent of the cement maker, data from Afrisam show. Pembani Group owns 30.5 percent, Holcim Ltd., the world’s largest cement maker, has 2 percent and Bunker Hills Investments Ltd. 1.5 percent.

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