Displaying items by tag: Assets

Germany: Following a comprehensive review of its assets HeidelbergCement has announced a Euro3.4bn impairment to its company value compared to the figure from a precious valuation prior to the second quarter of 2020. The company gave the reasons for the impairment as: the demand impacts of the coronavirus pandemic; economic effects on operations in individual countries; notably in the UK post-Brexit; and an increase in the market risk premium used by the Institut für Wirtschaftsprüfer (German public auditing body) for valuation to 7% from 6%. The largest regional impairment was Euro2.7bn, in Western and Southern Europe. Euro2.3bn of the total impairment, “relates to the Hanson acquisition” by HeidelbergCement in 2007.

Switzerland: LafargeHolcim has announced measures to limit the ‘volatile’ impacts of coronavirus on health and business. The measures, which overrule its previous 2020 guidance, consist of: a year-on-year capital expenditure (CAPEX) reduction of Euro378m, a year-on-year fixed cost reduction of Euro283m and a reduction of net working capital ‘at least in line with level of activity.’ LafargeHolcim has said that it had Euro7.56bn strongly liquid assets as of 26 March 2020.

LafargeHolcim predicted that global construction’s cement demand will decline in April and May 2020. It said the construction sector has begun to recover in China, where all of its cement plants outside of Hubei province are once more operational. It expects to deliver 70% of it April 2019 Chinese volumes in April 2020.

Ukraine: Italy-based Buzzi Unicem subsidiary Dyckerhoff Cement Ukraine has reported a profit of Euro29.2m in 2019, up by 362% from Euro5.67m in 2018. Ukrainian News has reported that the company increased its assets and decreased its accounts receivable and long-term liabilities during the year.

Egypt: The Egyptian Chemical Industries Company (Kima) plans to sell the land belonging to National Cement within the next year. Chief executive officer (CEO) Emad el-Din Mostafa said that the bankrupt cement producer owns over 300 hectares of land, according to Arab Finance. Selling the assets is part of the Ministry of Public Business Sector’s strategy to pay the former cement producer’s debts including worker salaries. The sale is expected to generate up to US$39m.

Tanzania: Kenya’s ARM Cement has improved a deal to sell its non-cement businesses by adding additional assets in Tanzania worth US$8.5m for free. Previously, the company said it had reached an agreement to sell its fertiliser and mineral production businesses in Kenya to Switzerland’s Omya & Pinner Heights, a company owned by its ARM’s chief executive officer (CEO) Pradeed Paunrana, for US$15.8m, according to the Citizen newspaper. ARM has added in its annual report
that potential buyers could acquire its non-cement operations in Tanzania for free.

The cement producer reported a loss of US$55m in 2017 due to poor demand in Kenya and Tanzania. It said it was undergoing a ‘significant’ review of its current operations, asset base and financing structure to address its problems.

Ireland: Irish building materials group CRH spent Euro8bn on acquisitions and disposed of Euro1bn worth of assets in 2015.

In a development strategy update, the company said that it made Euro430m from the sale of its clay and concrete products operations in the UK and its clay business in the US in 2015. It also gained about Euro530m through several additional divestments across Europe and the Americas. These included the sale of its 45% stake in French builders' merchant Doras and its 25% stake in Israeli cement producer Mashav. CRH had come under fire from some shareholders for retaining its stake in Mashav, as the company's cement has been used for a widely condemned security wall that divides Palestine and Israel.

During 2015, CRH completed 20 bolt-on acquisition and investment transactions. The company said that these deals, along with the acquisition of assets from Lafarge and Holcim, the CR Laurence acquisition and net deferred consideration payments, brought its development spend for 2015 to about Euro8bn.

"We are pleased with our progress in 2015, which brought cumulative proceeds from our multiyear divestment programme to almost Euro1.4bn, while our targeted bolt-on investments strengthened our existing businesses and complemented the major acquisition activity, which saw total acquisition spend of approximately Euro8bn in 2015," said CRH Chief Executive Albert Manifold. "Portfolio management, and in particular the reallocation of capital from lower growth areas into core businesses for growth, is a cornerstone of our value creation model."

India: Lafarge India has submitted a revised proposal to the Competition Commission of India (CCI) to sell its entire 11Mt/yr assets in India.

The decision comes after the company's plan to sell its 5.15Mt/yr cement capacity in Chhattisgarh and Jharkhand to Birla Corporation for US$749m ran into trouble. Investment bankers said that Birla Corporation was facing challenges in securing limestone mining rights for the two units.

In order to approve the LafargeHolcim merger in India, the CCI had asked Lafarge India to sell its 5.15Mt/yr of capacity in eastern India by 31 December 2015. In August 2015, Birla Corporation agreed to buy the proposed assets along with brands Concreto and PSC and mineral rights over adequate reserves of limestone. The deal was conditional on Birla Corp being able to secure mining rights that Lafarge had.

"Lafarge India has sought an extension of its deadline from the CCI to complete its divestment," said an unnamed investment banker. "Lafarge India has now put the entire company on the block, as the sale of the entire company will include transfer of mining rights."

Ireland/Philippines: CRH has completed the Philippines element of its Euro6.5bn acquisition of certain Lafarge-Holcim assets and as such has now completed the entire deal.

On 2 February 2015, CRH announced that it had reached agreement to acquire certain assets from Lafarge and Holcim for a total enterprise value of Euro6.5bn. On 3 August 2015, CRH confirmed that the majority of the transaction was complete, with the exception of the operations in the Philippines. In a press release issued on 15 September 2015, CRH announced that the Philippines element of the transaction is now complete.

World: LafargeHolcim will not sell any additional assets, except for those that were negotiated with the European Commission (EC) in order to approve their merger, according to French Collection. The combined group hopes to complete its overall integration by the end of 2016.

Ireland: CRH is paying Euro700m 'over the odds' for a Euro6.5bn acquisition that would make it the world's third-biggest building materials supplier, according to a report from US-based AllianceBernstein (AB), a global asset management company.

CRH has agreed to buy a number of mostly European assets from Lafarge and Holcim for Euro6.5bn so the merging companies can get competition clearance for their plan to create the cement industry's biggest company. However, AB has raised doubts about the value of the deal for CRH. The move was also was overwhelmingly approved by shareholders at a recent extraordinary general meeting.

In a detailed report into the deal, AB said that the move represented "A step in the wrong direction for CRH. The acquisition price of Euro6.5bn is 12% above our Euro5.8bn estimate of the fair value of the assets."