Singapore rejects Ohorongo deal

25 June 2019 | Business


The planned purchase of a majority stake in Ohorongo Cement by Sino-Singaporean firm International Cement Group was rejected this week by the Singapore Stock Exchange.
The announcement was made by International Cement Group’s board chairperson Ma Zhaoyang to shareholders this week.
The group had expressed an interest in acquiring Schwenk Namibia’s majority stake in Ohorongo Cement for approximately N$1.5 billion. The share sale reportedly includes the purchase of 1.53 million cumulative redeemable preference shares and 100 ordinary shares in Schwenk Namibia.
The deal also involves the transfer of outstanding shareholders’ loans that have been extended by Schwenk Namibia’s parent company, Schwenk Zement International Gmbh, to it.
According to Zhaoyang, Ohorongo Cement was not deemed to be profitable by the Singapore bourse.
“The target business to be acquired is not profitable. The Singapore Stock Exchange noted that the foreign exchange losses arising from the Schwenk loan claim remain in the pro forma financial statements after the proposed acquisition,” Zhaoyang said.
“As the Schwenk pro forma remains and will continue to affect the accounts of the pro forma after the acquisition, the Singapore Stock Exchange was of the view that the proposed acquisition is not able to satisfy rule 1 015(2) which requires the target business to be profitable.”
The bourse had also found that the International Cement Group did not have sufficient financial resources to fund the planned acquisition of Ohorongo Cement.
“The company does not have sufficient cash resources to fund the purchase consideration. It intends to possibly obtain significant external loans from financial institutions and a shareholders’ loan. Such loans, when considered with the potential losses of the target business, will result in a material adverse financial impact on the enlarged group,” Zhaoyang said.
The Singaporean bourse was further of the opinion that Ohorongo Cement will not be able to generate sufficient profits for the International Cement Group.
“There is no certainty that the target business will be able to generate sufficient profits to service the loans. Thus, the Singapore Stock Exchange is of the view that the proposed acquisition will put the company out of a healthy financial position,” Zhaoyang said.
Ohorongo's current shareholders include the Development Bank of Namibia, the Development Bank of South Africa, the Industrial Development Cooperation of South Africa and Schwenk Zement KG.
Ohorongo commenced production in December 2010 and has a current production capacity in excess of a million tonnes of high-quality cement annually, for both local consumption and special projects.
All raw materials required for the production process are sourced in Namibia and the entire value chain takes place locally.
Notable projects completed using cement produced by Ohorongo include the Neckartal Dam in the //Karas Region, the fuel storage facility at Walvis Bay and the St Helena airport.
The International Cement Group noted that following its successful diversification into the cement business in central Asia in 2017, the group has decided to expand its cement business into Africa.
When compared to building a new cement plant, having a commercially operational plant would eliminate project risk during the construction period, Strait Times reported.
The group is of the view that the proposed acquisition presents an attractive opportunity for it to seize growing business opportunities in Africa, arising from the construction of infrastructure there and/or generated from China's Belt and Road Initiative, it added.

OGONE TLHAGE
REJECTED: The planned sale of Ohorongo Cement to the International Cement Group has been rejected by the Singapore Stock Exchange.
Photo: NAMPA


Similar News

 

Big banks target South Africa's youth

15 hours ago | Business

Emma Rumney - South Africa's biggest banks are betting cut-price accounts, big mortgages and offers on everything from Adidas backpacks to Xboxes will help them...

Aapunguli yaGerman ya sholola

15 hours ago | Business

Omupresidende gwoGerman Bundesrat (Federal Council), Daniel Günther okwa popi kutya aapunguli yaGerman oya pyakudhukwa okupungula meliko lyaNamibia ihe omilandu dhilwe kombinga yetopolo lyeliko moshilongo odho...

Exploring the mining landscape

15 hours ago | Business

B7: What is the prevailing business landscape in your field of expertise?AB: The mining industry is one of the four pillars of Namibia’s economy, the...

The shame of our marble mines

5 days ago - 12 July 2019 | Business

Health and safety hazards, below-minimum wages, harsh working conditions and working without employment contracts are just some of the issues marble miners continue to endure...

The new era for market research

2 weeks ago - 03 July 2019 | Business

When we look at market research over time, it can be said that it has always had a special role to play in the marketing...

Chinese business presence no deterrent

2 weeks ago - 03 July 2019 | Business

Commentators are of the opinion that the presence of Chinese investors will do nothing to deter Western-aligned investors from making any investments in Namibia. This...

Rössing sale approved

2 weeks ago - 28 June 2019 | Business

The Namibia Competition Commission (NaCC) has approved the sale of Rössing Uranium Limited to the China National Uranium Corporation (CNUC), with stringent conditions.NaCC spokesperson...

NaCC approves Rössing sale

2 weeks ago - 27 June 2019 | Business

The Namibia Competition Commission has approved the sale of Rössing Uranium Limited to China National Uranium Corporation, but with stringent conditions, its spokesperson Dina Gowases...

Namibian beef finally enters Chinese market

2 weeks ago - 27 June 2019 | Business

Meatco's first consignment of Namibian beef was finally released into the Chinese market this week after it was exported in March. Namibian ambassador to China...

Singapore rejects Ohorongo deal

3 weeks ago - 25 June 2019 | Business

The planned purchase of a majority stake in Ohorongo Cement by Sino-Singaporean firm International Cement Group was rejected this week by the Singapore Stock Exchange....

Latest News

Keeping up with the neighbours

15 hours ago | Economics

LuandaYou would need around US$2 535.97 in Windhoek to maintain the same standard of living that you can have with US$7 600 in Luanda, assuming...

88 schoolgirls fall pregnant in...

15 hours ago | Education

Eighty-eight learners, including two girls in Grade 7, fell pregnant in the Oshana Region during the first term of 2019. Oshana governor Elia Irimari...

Stop blaming Aawambo - Kapofi

15 hours ago | Government

Home affairs minister Frans Kapofi has cautioned against tribalism and pointed out that there is a growing perception that only the Aawambo are beneficiaries of...

Mom begs for mercy

15 hours ago | Justice

A mother of three minor children is asking the High Court to reduce her four-year prison sentence, or fine her instead, after she pleaded guilty...

Relevant IFRS themes: Anytime, anywhere

15 hours ago | Business

A good understanding of International Financial Reporting Standards (IFRS) is crucial to the financial reporting process of IFRS reporters. Banks and Insurers in particular have...

Standard Bank faces strike vote

15 hours ago | Labour

ELVIRA HATTINGH Members of the Bank Workers Union of Namibia (Bawon) are to vote on whether to strike...

Let us tread carefully

15 hours ago | Opinion

When expectations are not met, citizens wronged in this regard should have channels, means and ways to air their grievances and have them addressed effectively.In...

Big banks target South Africa's...

15 hours ago | Business

Emma Rumney - South Africa's biggest banks are betting cut-price accounts, big mortgages and offers on everything from Adidas backpacks to Xboxes will help them...

Zim inflation almost doubles, stirring...

15 hours ago | Economics

MacDonald Dzirutwe and Karin Strohecker - Prices of cooking oil and other basics soared in Zimbabwe as inflation nearly doubled in June, piling pressure on...

Load More