Connect with us

Business

Bilfinger disposes of N23b equity in Julius Berger

Published

on

Bilfinger SE, the foreign majority investor in Julius Berger Nigeria Plc, is concluding to sell its entire equity stake in the Nigerian company on or before the end of this month, in a deal that was valued at about N23.1 billion.

Bilfinger SE, which holds 33.4 per cent in Julius Berger Nigeria, has decided to sell its remaining and final equity stake in the company. Julius Berger Nigeria’s share price remained unchanged on Thursday at the Nigerian Stock Exchange (NSE) at N52.39 per share.

The divestment is potentially valued at N23.1 billion on the basis of the market valuation of Julius Berger Nigeria by the close of trading at the NSE on Thursday. Julius Berger Nigeria, the 27th most capitalised company on the Nigerian stock market is valued at N69.15 billion. It has 1.32 billion ordinary shares of 50 kobo each.

A regulatory document indicated that Bilfinger SE has already informed the Nigerian directors of Julius Berger Nigeria of the decision to dispose the equity stake on or before the end of this month.

The equity sale, according to emerging details, will be offered to long-term Nigerian investors and will lead to the exit of the representative of Bilfinger SE from the board of Julius Berger Nigeria.

Julius Berger Nigeria is the leading construction company in Nigeria. Incorporated in 1970, it became a publicly quoted company in 1991. Watertown Energy Limited holds 10 per cent equity stake, the second largest by a single shareholder. Other substantial shareholders include Lagos and Benue states, which hold 5.50 per cent and 5.21 per cent respectively through their investment companies. Julius Berger Nigeria Group includes four wholly owned subsidiaries and two largely-owned subsidiaries.

It iwass unclear as at press time which Nigerian investors are being considered for the deal but sources said the foreign investors might opt for equity sales to investors currently holding substantial shares.

In 2011, Bilfinger, which then held 49.87 per cent equity stake in Julius Berger Nigeria, had sold down its equity stake. Julius Berger Nigeria then had 1.2 billion ordinary shares of 50 kobo each with market capitalisation of N56.59 billion out of which Bilfinger Berger held 598.4 million ordinary shares of 50 kobo each.

The equity sale might not be unconnected with Bilfinger’s strategic realignment from a construction company to an engineering and services group in the last decade which saw Bilfinger SE divesting totally from its construction activities.

The board and management of Julius Berger Nigeria have said they strongly believed that the exit of Bilfinger SE will not impact negatively on the company.

According to the company, ongoing strategic business directions being undertaken by the board and management would sustain and increase Julius Berger Nigeria’s efficiency and responsiveness as well as set basis for a future of long lasting success.

In order to strengthen its corporate independence, Julius Berger Nigeria had enhanced its on shore and off shore technical and logistic capacities by the establishment of a newly incorporated subsidiary, Prime Technology Design and Engineering Nigeria Limited for the provisions of design and engineering support services to the company.

The company also acquired a controlling majority share of the technical and logistic business and operations of Bilfinger Berger Nigeria GmbH, Wiesbaden, Germany, which assures Julius Berger Nigeria Plc of total control of all required services such as planning, procurement, recruitment and capacity building.

Julius Berger Nigeria has a rich portfolio of national contracts. Some of the contracts that were recently awarded to Julius Berger Nigeria included the second River Niger bridge project worth N130 billion, Apapa–Oshodi Expressway Section 2, Phase II, estimated at N15 billion and the National Assembly Phase III, Part 3, Abuja, estimated at N40.2 billion.

Analysts at GTI Securities said Julius Berger Nigeria’s share price has a fair value of N87.70 within a 12-month investment horizon, indicating potential capital gain of 67.4 per cent.

Ripples…without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now

Click to comment

0 Comments

  1. Don Lucassi

    June 19, 2015 at 4:21 pm

    This might be a good time to buy shares in JB as they would need to raise money to buy the equity. The fear though is that we dont know how highly the new government rates them to give them jobs, even though I know they still have long term contracts from the previous government. One also has to know what the construction industry figures of projection are, but on the basis of it, shares in JB sounds very inviting now.

Leave a Reply

Your email address will not be published. Required fields are marked *

four − three =