UAE firm looking to offload stake in Lafarge Emirates Cement as it looks to repay $10bn debt
Dubai Group is in negotiations to offload its 45% stake in a joint venture firm with French cement maker Lafarge, as the state investment vehicle seeks to sell assets to repay its $10bn debt.
The potential share sale in Lafarge Emirates Cement has generated interest from regional cement makers which are trying to cash in on a gradual recovery in the UAE’s construction sector.
The JV, which was founded in 2005 by Lafarge, the largest cement company in the world, Dubai Group, part of conglomerate Dubai Holding, and the Fujairah government, is currently restructuring and needs additional capital to help support the business, something Dubai Group is unable to provide due to its debts.
“The costs are more than the equity and they don’t reflect the current price of cement. They need to put more equity in and while Lafarge should do, Dubai Group definitely doesn’t have the money,” a UAE-based banking source was quoted as saying by Reuters.
The company runs a plant in Fujairah with a production capacity of 3.2 million tonnes of cement.