Lafarge Surma calls for a revaluation of Holcim shares to complete its merger

Lafarge Surma Cement (now LafargeHolcim Bangladesh Ltd) has appealed to Bangladesh Bank to review its valuation of the Holcim share price, which the French cement maker says has been significantly undervalued by the central bank.

In December 2016 Lafarge Surma signed an agreement with the Amsterdam-based Holderfin to purchase its holdings of Holcim Cement Bangladesh for BDT9360m (US$117m). Each of Holcim's 88,244 shares was valued at US$1325.88 (BDT106,000).

But since then, the central bank in September allowed Lafarge to repatriate BDT504,780m by cutting down each share price of Holcim Cement Bangladesh to BDT57,202 from BDT106,000 set by the company, reports the Daily Star.

"We smell laundering of money through the overvaluation of Holcim shares," said a BB official requesting not to be named.

"The difference between the amount agreed in the share purchase agreement and the amount approved by the BB to remit out of this transaction is significant," said Lafarge in a statement.

Lafarge has informed the central bank that it is not possible to complete the merger with Holcim if the BB does not allow it to remit BDT9360m.

The BB decision has put pressure on the share price of Lafarge on the Dhaka Stock Exchange. LafargeHolcim Bangladesh Ltd wil have a cement capacity of 4.2Mta when the merger is completed.