Nigerian Bank Nigeria Access Bank Plc – Dangote Pays N193 Billion Bank Loans

Source Daily Trust: Kayode Ekundayo, January 19 2010

Lagos — The Dangote Group yesterday liquidated a $1.27 billion loan facility it took from a consortium of 10 Nigerian banks in May 2008 to finance its cement division’s expansion projects five years ahead of schedule.

At the presentation of the cheques to the banks at Ibese cement plant in Ogun State, the president and chief executive officer of the Dangote Group Alhaji Aliko Dangote also said his companies intend to crash the price of a bag of cement to N1,000 when the production from its cement companies in Nigeria hits 20 million metric tonnes by the first quarter of 2011.

The banks involved in yesterday’s loan liquidation were Bank PHB, Fidelity Bank, United Bank for Africa, Afribank, First Bank, Access Bank, FCMB, Stanbic IBTC, Zenith Bank and Guaranty Trust Bank.

Terms of the loan indicates repayment schedule of seven years while the first payment was scheduled to commence in August 2010, with the last payment scheduled in 2015.

Dangote said the loan was acquired in 2008 for the purpose of expanding the second phase of the largest cement plant in sub-Saharan Africa, located in Obajana, Kogi State, and to kick start the cement plants in Ibese and Senegal.

“These projects when completed will bring total production output of Dangote Cement in the Nigerian market to 20 million metric tonnes per annum by the first quarter of next year. It also expect that by the same period, the output from Zambia, Senegal and Ghana will be 4.5 million metric tonnes per annum, making the group’s African market output to 24.5 million metric tonnes per annum”, he said

He said with these, Dangote Cement would become the second largest cement manufacturer in Africa after Larfarge and amongst the top 12 in the world. Alhaji Aliko also said the total output is expected to bridge the gap in cement supply in the market as well as increase the nation’s GDP, reduce reliance of cement imports and boost employment whilst developing skills.

According to him, the essence of repaying the loan within 20 months of obtaining it was to enhance the consolidation of cement assets. “The Dangote group is embarking on consolidating our cement assets in line with our strategy to consolidate our Nigerian assets. As a result, we have decided to repay the $1.27 billion loan facility we took in May 2008 from a consortium of 10 banks. Although the loan is due to mature in 2015, we have decided to liquidate the loan five years ahead of schedule in line with our vision and strategy to consolidate our assets and to ensure that Dangote Cement does not owe any Nigerian bank.”

He further said the group has so far invested $3.5 billion in cement expansion projects in Nigeria and across the continent, out of which only $1.27 billion was sourced from a consortium of 10 Nigerian banks while the balance was from cash flow generated by the group.

“We anticipate that by first quarter of next year, Dangote cement will achieve our projection target of 20 million metric tonnes per annum from our Nigerian operations, a further 1.5 million tonnes from our plant in Senegal and 1.5 million tonnes from Zambia plant. With our expansion across the West Africa region, our terminal in Ghana will add a further. 1.5 million tons “, he said.

Nigerian Bank Nigeria Access Bank Plc, Afribank Nigeria Plc, Bank PHB Plc, FCMB First City Monument Bank Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, GTB Guaranty Trust Bank Plc, Stanbic IBTC Bank Plc, UBA United Bank for Africa, Zenith Bank Plc