The Israeli infrastructure and construction company has sustained heavy losses in Nigeria due to the sharp depreciation last year of the Nigerian naira.
Israeli construction and building company Shikun & Binui (TASE: SKBN) has pulled out of Nigeria after sustaining heavy losses due to the sharp depreciation of the Nigerian currency the naira last year against the US dollar. The decision to end activities in the African country is one of the first measures taken by controlling shareholder and acting chairman Naty Saidoff following the resignation of CEO Tamir Cohen last week.
Shikun & Binui has signed a non-binding memorandum of understanding with a third party to sell its entire infrastructure activity in Nigeria for $100 million (in several installments) – a move that, if realized, would result in a loss in the range of NIS 220-290 million in its 2024 report. The withdrawal from all activity in Nigeria will reduce the backlog of housing and construction works by about NIS 590 million.
On the positive side, Shikun & Binui will record a cash flow of about NIS 340 million as a result of the sale, which will help it slightly reduce its high net debt, which has soared in recent years with the company’s entry into a series of large projects, including construction of IDF bases in the south. At the end of the quarter Shikun & Binui’s net debt NIS 11.3 billion.
Nigeria has been a major focus of infrastructure operations for Shikun & Binui with most projects (mainly road construction) coming from government ministries and local authorities. However, in recent years operations in Nigeria have become problematic.
Published by Globes, Israel business news – en.globes.co.il – on July 14, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
Naty Saidoff credit: Eyal Izhar
