China Construction Bank contributes $10 million USD to EUR 225 million syndicated loan for the Lakatabu Cement Plant Expansion Project

Project narrative

On May 26, 2009, a syndicate of banks — including China Construction Bank Corporation (CCB) — entered into a €225 million ($303 million USD) syndicated dual-currency corporate facility with Lafarge Cement WAPCO Nigeria Plc — a subsidiary of France's Lafarge S.A. — for the Lakatabu Cement Plant Expansion Project. This facility carried a maturity period of 3.75 years, a grace period of 2.5 years, and a repayment of 15 months. It was divided into three tranches: Tranche A, an €85 million EUR ($114.47 million USD) tranche for refinancing of an equivalent bridging facility provided by the mandated lead arrangers in December 2008 with an interest rate based on an unspecified floating rate and a margin of 400 basis points (bps); Tranche B, a NGN 27.937 billion ($140 million USD) syndicated medium-note with an interest rate of the Nigerian inter-bank rate (NIBOR) plus a margin of 125 basis points (bps); and Tranche C, a $114.47 million USD-NGN equivalent syndicated medium-term discounted note standby facility to be used to refinance part or all of the amount outstanding under Tranche A in case exchange rate movements justified locally-denominated and not USD-denominated debt. The aggregated drawn amount under Tranche A and Tranche C could not exceed $114.7 million USD) at any any time. CCB contributed $10 million USD to €85 million EUR Tranche A. In addition to CCB, the following lenders contributed the follow amounts: Stanbic IBTC ($38 million USD), Standard Chartered Nigeria ($26 million USD), Citibank Nigeria ($15 million USD), Guaranty Trust Bank (Nassau) ($13 million USD), and Standard Bank ($12.25 million USD). CCB served as an arranger for Tranche A. Stanbic IBTC served as mandated lead arrangers and global coordinator for the whole facility. Guaranty Trust and Standard Chartered served as mandated lead arrangers for the whole facility. CCB did not contribute to Tranche B or C. The following banks contributed the respective amounts to Tranche B: First Bank (NGN 5 billion), Guaranty Trust (NGN 5 billion), Stanbic IBTC (NGN 4.6 billion), Union Bank of Nigeria (NGN 3.39 billion), Standard Chartered Nigeria (NGN 1.947 billion), Access Bank (NGN 1.6 billion), Bank PHB (NGN 1.6 billion), Ecobank Nigeria (NGN 1.6 billion), First City Monument (NGN 1.6 billion), First Securities Discount House (NGN 1.6 billion), and Platinum Habib Bank (NGN 1.6 billion). The following banks contributed the respective amounts to Tranche C: Stanbic IBTC ($36 million USD NGN-equivalent), Standard Chartered Nigeria ($25.97 million USD NGN-equivalent), First Bank of Nigeria ($20 million USD NGN-equivalent), Guaranty Trust ($12.5 million NGN-equivalent), Bank PHP ($10 million NGN-equivalent), and Ecobank ($10 million NGN-equivalent). The proceeds were to be used by finance the expansion of the Lakatabu cement plant located at Ewekoro in Ogun State to increase its capacity by2.2 million metric tons per annum via the construction of a new 5,000 metric-ton-per-day dry production kiln line, additional storage facilities for raw materials, a conveyor belt between the quarry and the new kiln line, coal storage and grinding stations to improve the kiln's reliability, and a 100 MW captive multi-fuel power plant using six Wärtsilä 18V50DF engines. Wärtsilä and CBMI Construction were the engineering, procurement, and construction (EPC) contractors and equipment suppliers responsible for project implementation. Construction began in July 2008 and was expected to be completed in 2011. Full operations at the plant began in December 2011.