Africa’s sixth wealthiest man Abdul Samad Rabiu has seen his stake in his flagship company BUA Cement Plc decline by $815 million (N336 billion) since Jan. 4.
The $815-million market value loss was occasioned by a decline in the share price of BUA Cement as investors and shareholders sold off their stakes to position for yields in the fixed income space.
In reaction, BUA Cement shares fell by about 13 percent compared to the all-time high of $0.21 (N85.00) it recorded earlier this year on the Nigerian Stock Exchange (NGX).
BUA Cement is the fourth most capitalized company on the NGX. At a share price of $0.18 (N74.25), the leading cement manufacturer maintains a market valuation of about $6.1 billion (N2.5 trillion).
The company is set to overtake Lafarge Africa as Nigeria’s second-largest cement producer in installed capacity as three new production lines in Adamawa, Edo and Sokoto states launch in 2022. The new facilities will have a capacity to produce 3 million metric tonnes of cement per annum each. That would expand BUA’s total installed cement production capacity to 20 million metric tonnes from 8 million metric tonnes, surpassing Lafarge Africa’s 10.5-million-metric-tonne capacity.
Rabiu founded BUA Group in 1988. It is one of Africa’s biggest manufacturing conglomerates. He is the single majority shareholder in BUA Cement.
According to Forbes, the billionaire, whose net worth is estimated at $5.5 billion, owns 98.5 percent of BUA Cement. His shareholding in the cement company accounts for about 31.27 billion units of its 33.9 billion total issued ordinary shares.
With the shares of BUA Cement declining from a record high of $0.21 (N85) per share on Jan. 4 to $0.18 (N74.25) per share recently, the market valuation of Rabiu’s stake in his cement company has declined by $815 million (N336 billion).
News of the company’s projected expansion from 8 million metric tonnes to 20 million metric tonnes by the close of 2022, triggered buying pressures in the company’s shares toward the end of 2020.
Shares rose from 13 cents (N55.00) on Dec. 22 when the company went public to $0.21 (N85.00) at the close of trade on the NGX on Jan. 4.
However, analysts questioned the company’s valuation and the rising yield in the fixed income space spiked market tensions, which made some wary investors sell off their stakes in the cement company in search of yield and impressive gains elsewhere.
The move led to a decline in the share price from the all-time high of $0.21 (N85.00) to $0.18 (N74.25) at the opening of the NGX this morning.