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Lafarge Africa has announced that it plans to seek shareholder approval next month to raise N140 billion via a rights issue, according to a Reuters report on Monday.

The announcement comes after the cement manufacturer reported in April that its 2017 first quarter revenue rose by 55 per cent to N81.31 billion as domestic cement sales grew significantly owing to seasonality effects. The company also reported a rise in after-tax profit to N5.16 billion in Q1 2017 compared to a loss after tax of N1.87 billion a similar period of last year.

The growth in the company’s earnings in the last quarter also follows a pre-tax loss of N22.82 billion in its 2016 full year, owing to a hefty foreign exchange loss arising from the impact of the devaluation of the naira on shareholder loans of $310 million and external borrowings of $85 million.

Lafarge Africa also said it plans to seek shareholder approval to convert loans due from a shareholder to equity as part of the rights issue.

The rights issue is expected to allow Lafarge Africa shore up its depleted cash reserves as the company faces a challenging operating environment in Nigeria and South Africa. In the 2017 first quarter, the company reported a negative cash flow of N1.68 billion compared to a cash flow of N24.64 billion in a similar period of last year.

Founded in 2014, Lafarge Africa Plc is a subsidiary of LafargeHolcim, the world's leader in the global building materials industry, also operating in emerging market nations. Lafarge Africa is the second largest cement company in Nigeria after Dangote Cement, the market leader. The company controls four cement companies in Nigeria: LafargeWapco, based in Ogun State; AshakaCem, based in Gombe State; Atlas Cement, based in Rivers State; and Unicem, based in Cross River State. The company also owns Lafarge South Africa Limited.