Frank Buyanga eyes Lafarge Cement
FLAMBOYANT businessman, Frank Buyanga, is eyeing a 40 percent stake in cement manufacturer, Lafarge Cement Zimbabwe, a unit of Lafarge-Holcim, the world’s largest building materials producer with operations in 90 countries worldwide employing 115 000 workers.
The Financial Gazette’s Companies & Markets (C&M) understands that Buyanga has approached Lafarge’s executives with his proposal, and is planning to make the acquisition through African Cell (Private )Limited, a subsidiary of South Africa-based Hamilton Capital.
Hamilton Capital’s interests cut across the hospitality, mining, micro-finance and construction sectors.
In a letter to Lafarge’s chief executive officer (CEO), Amal Tantawi, dated April 25, 2016, Buyanga said he was interested in “purchasing Lafarge Zimbabwe”.
The letter, which suggested that an offer had been made earlier, said: “Please kindly note that one of our subsidiaries African Cell P/L will be purchasing and is interested in a major stake in the business.”
Lafarge is listed on the Zimbabwe Stock Exchange and publicly trades its shares.
Buyanga confirmed to C&M from South Africa that he was planning to buy into Lafarge.
He said they were interested in a 40 percent shareholding in the company but could increase their interest to as much as 60 percent if the shares were available.
Buyanga, known as a loan shark in Zimbabwe after several property owners, mostly in Harare, allegedly had their properties sold by his firm after they failed to repay loans advanced to them through Hamilton Property Holdings Limited, another subsidiary of Hamilton Capital, relocated to South Africa following alleged political involvement in the dispute between Hamilton Property and ruling party bigwigs and cronies who had borrowed from his firm.
Buyanga copied his letter to Lafarge to the National Indigenisation Economic Empowerment Board (NIEEB).
The letter was received by NIEEB’s CEO, Wilson Gwatiringa’s office on April 26.
A NIEEB official said Lafarge had not fully complied with the indigenisation law which requires foreign-owned companies to cede 51 percent of their shareholding to locals.
But he indicated that they were not involved in Buyanga’s bid for a stake in the company.
Clarifying the indigenisation and economic empowerment policy last month President Robert Mugabe emphasised the need for investors in the resources sector to comply with the indigenisation law saying this was non-negotiable.
But he indicated that for existing businesses in which government did not have a 51 percent stake, compliance “should be through ensuring that local content retained in Zimbabwe by such businesses is not less than 75 percent of gross value of the exploited resources”.
“Local content here refers to the value retained in Zimbabwe in the form of wages, salaries, taxation, community ownership schemes and other activities such as procurement and linkage programmes,” he said.
Buyanga told C&M: “I am looking to buy a significant stake in the business. I do not have the valuations at hand but my budget is not limited. We have to buy (the shares) at their right market value. The foreign company on the list own 76 percent. That is what I am eyeing.”
Lafarge-Holcim owns 76,5 percent of Lafarge Zimbabwe through Associated International Cement.
In February this year, the company was quizzed by the Parliamentary Portfolio Committee on Youth and Indigenisation over its failure to meet the December 2015 indigenisation compliance deadline.
Tantawi told the committee, chaired by Gokwe Nembudziya MP Justice Mayor Wadyajena, that indigenous partners currently owned 24,9 percent shares, while Lafarge held the remaining 75 percent.
She said the cement maker was in the process of implementing its indigenisation plan.
Lafarge plans to contribute 10 percent shareholding to community share ownership trusts (CSOTs), seven percent to employee ownership trusts, and 10 percent to NIEEB.
Company lawyer, Munyaradzi Nzarayapenga, said Lafarge’s indigenisation plan was at an advanced stage with three CSOTs — Mabvuku-Tafara, Uzumba-Maramba-Pfungwe and Goromonzi — having benefited to the tune of US$1 068 000.
He said US$500 000 had been put into corporate social responsibility projects.
As at February 28, 2016, Lafarge had paid the Mabvuku-Tafara CSOT US$333 000, the Uzumba-Maramba-Pfungwe CSOT had been given US$401 000, while the Goromonzi CSOT received US$333 000.
Buyanga’s businesses are intricately linked with British tycoon, Nicholas van Hoogstraten, who has a son called Hamilton. Buyanga has said the British property mogul gave him a US$25 million facility in 2008, which he used to build his business.
Van Hoogstraten has a £41 million Sussex mansion called Hamilton Palace. British media reported over a month ago that the vast house, near Uckfield in East Sussex, has still not been completed, despite the fact work began on the property in 1985.
The target of Buyanga’s planned acquisition, Lafarge Cement Zimbabwe, was formerly Circle Cement which is known for its contribution to the construction industry over the years. It’s cement was used in the construction of the Kariba Dam, the Kabora Bassa Dam, major bridges in the country and almost all high-rise buildings in Harare.
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