PPC is “fundamentally strong and profitable,” approves $253mln rights issue

PPC is “fundamentally strong and profitable,” approves $253mln rights issue

BULAWAYO, August 2 (The Source) — Regional cement producer Pretoria Portland Cement (PPC) says it “is fundamentally strong and profitable with a solid operating base” and is on track to complete its projects in Zimbabwe, DRC and Ethiopia.

Chief executive Darryll Castle told shareholders at the company’s extraordinary general meeting in Johannesburg on Monday — at which shareholders approved PPC’s proposed R4 billion ($253 million) rights issue unanimously – that the company has appropriate plans in place to navigate the current economic landscape by driving cost efficiencies.

“PPC is fundamentally strong and profitable with a solid operating base. I am confident that we have the appropriate plans in place to navigate the current economic landscape by driving cost efficiencies and leveraging our capabilities to achieve operational excellence,” Castle said.

“We are on track to complete our sizeable projects in the DRC, Ethiopia and Zimbabwe which, in the medium-term, will start to contribute to PPC´s revenue stream.”

Commenting on the rights issue, Castle said it was “a pleasing result for PPC” and it placed them firmly on a path to resolving their immediate liquidity challenges as well as enabling them to pursue their corporate strategy.

PPC is constructing a $75 million plant in Harare which will have capacity to produce 680,000 tonnes annually which is due to come online later this year.

The capital raise move is part of a strategy to review its balance sheet to pay off debts due this year and next year, which it said would put it in good stead to execute its plans.

PPC’s only cement plant in Zimbabwe, located in Bulawayo, produced around 600,000 tonnes of cement last year while operating at 75 percent of installed capacity.

The group also has a lime clinker plant in Coleen Bawn in Matabeleland South but the bulk of its cement market is in Harare.