The French-Swiss building materials company has signed an agreement with YTL Cement Berhad for the divestment of its entire 51% shareholding in Lafarge Malaysia Berhad for a cash sum of US$396m.
The Lafarge Malaysia Berhad operation features three integrated cement and two grinding plants. With the divestment, LafargeHolcim will fully exit the Malaysian market. YTL Cement Berhad is part of YTL Corporation Berhad, a Malaysian infrastructure conglomerate, which is mainly active in cement production, construction, property development and utilities.
LafargeHolcim has also signed an agreement with YTL Cement Singapore for the divestment of its entire 91% shareholding in Holcim Singapore. The value of the transaction was not disclosed, but the Holcim Singapore business has an estimated enterprise value of nearly US$67m.
LafargeHolcim has been pursuing a strategy of divesting operations in fringe markets. Earlier this year it completed the sale of its majority stake in Holcim Indonesia to Semen Indonesia for US$1.75bn.
Jan Jenisch, CEO of LafargeHolcim, said: “As part of our Strategy 2022 – ‘Building for Growth’ we have committed to divestments in order to deleverage and to further strengthen our balance sheet. The proceeds from this transaction will further improve our debt ratios with the target of 2 times net debt to recurring EBITDA by the end of this business year.”
The divestment of the Malaysia and Singapore businesses is expected to close in Q2 subject to approvals.
YTL Cement is a subsidiary of YTL Corporation Berhad, which is an integrated infrastructure developer with international operations in countries including the United Kingdom, Singapore, Indonesia, Australia, Japan, Jordan and China. The YTL Group’s core businesses comprise power generation (in both contracted and merchant markets), owning and managing water and sewerage facilities, merchant multi-utility services, communications, construction contracting, cement manufacturing, property development and investment, hotel development and management, e-commerce initiatives and internet based education solutions and services.
