PPC sells Cimwera to National Cement Holding Ltd for US$42.5m

PPC Ltd has completed the sale of its 51 per cent stake in Rwandan cement producer Cimerwa to National Cement Holding Ltd for a cash consideration of US$42.5m. The deal is a significant step in PPC's strategic shift to focus on its southern African operations and improve its financial leverage.

The share transfer is set to take place seven business days after the necessary conditions are met, including notifications and clearances from the Common Market for eastern and southern Africa (COMESA), Rwanda Revenue Authority, and Cimerwa’s banking partners, as well as a non-objection from the Rwanda Stock Exchange regarding an off-market sale agreement.

Cimerwa, which reported a net asset value of RWF1.2bn (US$0.973m) and a net profit after tax of RWF237m for the fiscal year ending 31 March 2023, has been a profitable venture for PPC, reflected in its book value of US$38.5m. The transaction is supported by a corporate guarantee from National Cement Company Ltd within the Devki Group and includes customary warranties.

The sale aligns with PPC’s capital allocation priorities that emphasise maximising shareholder returns. It is classified as a category 2 transaction according to the JSE Listings Requirements, which means it does not require shareholder approval but will impact PPC's capital management strategy.

National Cement's parent company, Devki Group, will now spearhead Cimerwa’s growth initiatives in Rwanda and East Africa, with a particular focus on supporting infrastructure development.