BEE controlled minerals exploration, development and investment company Sephaku Holdings on Tuesday announced that a heads of agreement has been signed with Dangote in relation to the funding of a cement project held by its 80.2%-held subsidiary, Sephaku Cement.

Dangote, who currently holds a 19.8% interest in Sephaku Cement is one of Nigeria's largest manufacturing conglomerates with interests in cement, sugar, salt and flour.

Under terms of the agreement Sephaku Cement will undertake an issue of additional shares to Dangote in order to raise R779 million.

This will result in Dangote holding a 64% interest in Sephaku Cement.

The implementation of the Dangote issue will provide the entire equity requirements for the project.

Dangote has also agreed to provide the necessary guarantees required for Sephaku Cement to secure the debt funding required for the cement project, and fund any overruns on the project with a loan on commercial terms up to an amount of R265 million.