Shareholders at Irish cement manufacturer Ecocem, including the financier Dermot Desmond, may soon be in line for a windfall after the group proposed to restructure its capital to allow it pay a dividend of up to €5 million.
Company documents for Ecocem Materials Ltd show that the directors of the group, including former Bank of Ireland governor Laurence Crowley, signed off on the proposal at a meeting in January.
The directors said the proposed reduction in Ecocem’s capital would create a distributable reserve “to allow for the prospect of the payment of dividends in future”, as long as the company can afford it.
As part of the restructuring, the company was obliged to give an up to date statement of its assets. At the end of December, the directors declared, Ecocem Materials had total assets of €46 million and liabilities of €6.5 million.
Ecocem, which has operations in Ireland, Netherlands and France, produces a type of less environmentally-damaging cement using waste from steel furnaces. It says that this way of manufacturing cement emits less greenhouse gases than traditional methods.
Biggest beneficiaries
In its last filed set of accounts it reported sales for 2017 of almost €80 million.
The biggest beneficiaries of any dividend that may emerge from Ecocem would be the family of the company’s founder, Donal O’Riain, who owns more than a third of Ecocem through a Dutch-registered entity.
French building materials company Saint Gobain is the next largest shareholder, while Mr Desmond holds the third-largest stake, with about 16 per cent. The financier's IIU Investments has been stake-building in Ecocem. It bought a further tranche of shares from Wicklow businessman Michael Kelly last August.
The other major shareholder bloc in Ecocem is the family of Ged Pierse, who ran an Irish construction industry dynasty.
Ecocem has been in expansion mode in recent years. It has a major joint venture with steel manufacturer Arcelor Mittal in France, where it opened a new facility in Dunkirk last year.
Its operations in the UK include a facility on an old Manchester shipping canal. Ecocem has also tried in recent years to build a facility in California, although it has run into local planning opposition there on environmental grounds.
France-based Mr O’Riain recently told journalists that the company is in expansion mode and may become a candidate for a public listing, but not for up to 10 years.
Conor O’Riain, a director and senior executive of the business, had last night not yet replied to a request for comment on the capital restructuring.
