The Israeli infrastructure and construction company suffered huge losses in Nigeria due to the sharp devaluation of the Nigerian naira last year.
Israeli construction company Shikon and Benoy SKPN (TASE: SKBN) has pulled out of Nigeria after suffering heavy losses due to the sharp depreciation of the naira against the US dollar last year. The decision to wind down operations in the African country is one of the first steps taken by controlling shareholder and acting chairman Nati Saidoff after CEO Tamir Cohen resigned last week.
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Shikun and Benoy have signed a non-binding memorandum of understanding with a third party to sell their entire infrastructure business in Nigeria for $100 million (in several installments) – a move that, if realized, will result in a loss of between NIS 220 million and NIS 290 million in their 2024 report. The withdrawal from all activities in Nigeria will reduce the housing and construction backlog by about NIS 590 million.
On the positive side, Shikun & Binui will record a cash flow of approximately NIS 340 million from the sale, which will help it reduce its slightly elevated net debt, which has risen significantly in recent years as the company embarked on a series of large-scale projects, including the construction of IDF bases in the south. At the end of the quarter, Shikun & Binui’s net debt stood at NIS 11.3 billion.
Nigeria has been a major focus for Chicon and Benue’s infrastructure operations, with most projects (mainly road construction) coming from government ministries and local authorities. However, in recent years operations in Nigeria have become problematic.
This article was published in Globes, Israeli Business News – en.globes.co.il – on July 14, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
Nati Seidoff Credit: Eyal Yizhar
