Algeria In Talks With Citadel Capital On ASEC Algeria Acquisition

The Algerian government said it has started negotiations with Citadel Capital (CCAP.CA) on acquiring a 49% stake in ASEC Algeria Cement, a subsidiary of ASEC Cement Holding (ACH), through right issue to increase the company’s capital which worth $60 million. ASEC Algeria plans to establish a new cement plant at a production capacity of 3.5 million tons  in Gulfa city.

ASEC Cement Holding is Citadel Capital’s arm in cement sector.

Under Algerian regulations on banking finance, the firms that have been founded in Algeria or have local contributors shall obtain loans through Algerian banks only.

In case of reaching an acquisition deal with the Algerian government, ASEC Algeria shall re-make its financial study on the construction of two cement production lines as the government intends to inject further liquidity for the firm. ASEC’s current study targets obtaining loans of $180 million so as to establish the first production line of which 30% has been completed.

The total cost of the two cement production lines ranges between $560 – 570 million. The cost of each line ranges between $320 – 330 million.

Worth mentioning, the Algeria has made a decree stipulating that local shareholders have to own at least 51% of the newly-established cement firms’ stakes. ASEC Algeria Cement has been founded before the issuance of the Algerian decree, so it is exempted from getting local partner.