BY SHAME MAKOSHORI A LITTLE-KNOWN but significantly influential domestic firm that shook the status quos to clinch a deal, giving it majority control of Lafarge Cement Zimbabwe, has escalated its excursion after reducing the transaction to a legal pact.
In a market update Tuesday, the Zimbabwe Stock Exchange (ZSE)-listed cement maker said Fossil Mines Private Limited, which trumped deep pocketed suitors to land the deal, moved its first step into the boardroom by inking a binding agreement with Associated International Cement Limited (AICL), which has placed its 76,5% stake in the business on sale.
The phrase binding agreement is commonly used to indicate that two parties have knowingly entered into an agreement and that the parties are now responsible for actions described by the contract.
Binding agreements, which are legal contracts, can be enforced under laws, and should there be a dispute related to the fundamentals of a contract, or if there has been a breach of contract, the parties may need to resolve the case in court.
Acting company secretary Arnold Chikazhe said the two parties were moving to sign a sale and purchase agreement.
“Further to the cautionary announcement dated June 6, 2022, shareholders and members of the investing public are advised that Associated International Cement Limited, a member of the Holcim group, has entered into a binding agreement for the sale of its 76,45% stake in Lafarge Cement Zimbabwe Limited to Fossil Mines (Private) Limited, and are in the process of preparing the consummation of the sale and purchase agreement,” Chikazhe said, sharing progress with investors and stakeholders.
“The transaction, if successfully concluded, may have a material effect on the company’s securities. Accordingly, shareholders and members of the investing public are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” Chikazhe added.
This week’s deal followed last Wednesday’s announcement by Lafarge that Fossil would take charge during the fourth quarter (Q4).
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In a special note to shareholders prepared to explain the deal during an annual general meeting last Wednesday, the firm maintained that it would be premature to disclose how much Fossil would pay for the deal.
But it said the Zimbabwean outfit trumped stiff competition for the asset based on its current scope of business and demonstrable ability to run a sustainable operation.
“The value of the transaction cannot be disclosed as finalisation of the deal is still ongoing. It is expected to be finalised by Q4, 2022,” Lafarge said.
“Fossil has been identified as the best next owner of Lafarge Cement Zimbabwe, offering an ideal home for our people and our customers to continue to thrive and sharing our deep commitment to sustainability, people and communities given Fossil’s existing business,” it added.
It allayed fear over the future of Lafarge’s workforce in the aftermath of the deal.
“The transaction is not a restructuring exercise, but rather about further investing and developing the business in Zimbabwe to unleash its full potential. It is, therefore, anticipated that the outcome of this process will strengthen the position of employees and will enhance their professional growth and development,” the note added.
Chinese outfit Huaxin had been seen as the frontrunner in the race to takeover Lafarge after executing similar deals in neighbouring Zambia and Malawi.Follow us on Twitter @NewsDayZimbabwe