Dangote Cement moves on with plan to list on London bourse in two years

Dangote Cement Plc. is moving forward with plans to sell its shares on the London Stock Exchange within the next two years. The company is seeking to raise funds that will aid the expansion of its operations.

The Chief Financial Officer Brain Egan on Tuesday, told investors on a conference call after reporting first-quarter financials that Africa’s cement giant is looking to raise $500 million on top of a 300 billion naira ($833 million) local-currency bond, via a Eurobond issuance.

Following the appointment of the company’s new Chief Executive Officer Joseph Makoju, Africa’s biggest producer of building material started pushing expansion agenda involving the reservation of $350 million for capital projects this year. Nigeria’s biggest company also plans to boost shipments to surrounding West African countries by building export facilities at the seaports of its home country.

At the beginning of this week, Dangote Cement appointed former Xstrata Plc Chief Executive Officer Mick Davis and Cherie Blair–a lawyer and the wife of ex-U.K. Prime Minister Tony Blair–as non-executive directors. These appointments have been interpreted to be the first ploy in listing on London bourse, as the cement maker had previously mulled a share sale in the U.K. capital in 2010, Bloomberg reported.

In 2010, Dangote Cement with help from Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley had made plans for a sale that could have raised as much as $5 billion for equity, but the plan was laid to rest.

Regardless of having free float in Lagos of 14.9% and a market valuation of $12.3 billion, the company’s choice of London will see it break records in an initial public offering, because no other Nigeria-based company has raised more than Starcomms Plc’s $796 million in 2008.

Citing London as a strategic market to raise capital, the Dangote Cement share sale is estimated to raise about $1 billion, as confirmed by informants who spoke to Bloomberg.