Cemex announces global CPO offering

Published:  23 September, 2009

MEXICO: Cement giant Cemex SAB said it plans to raise $1.55bn after pricing 1.3 billion of its ordinary participation certificates (CPO shares) in a global offering, the proceeds of which will be used to pay down its heavy debt load.

In a press release, Cemex said 975 million CPO shares will be sold in the US and other international markets, directly or in the form of American Depository Shares (ADS), and 325 million CPO shares will be sold in Mexico.

The offering was increased from the originally announced amount of 1.2 billion CPOs, according to the Wall Street Journal.

The capital increase is part of a $15bn debt rescheduling agreement reached last month with around 75 of banks and private noteholders that allowed Cemex to avoid a default by extending maturities to 2014. The debt was initially scheduled to mature between 2009 and 2011.

Cemex, one of the world's top three cement and building-materials companies, committed itself to raising at least $1bn in equity by June of next year to avoid higher costs on the rescheduled debt.

The cement maker also said it would use free cashflow, cash proceeds from non-core asset sales and capital market transactions to meet the new payment schedule.

Cemex has agreed to sell its Australian assets to Switzerland's Holcim $1.62bn, although Austria's Strabag pulled out of a deal to buy Cemex's Austrian and Hungarian operations for 310m euros in July.

Cemex ran into trouble when it borrowed heavily in 2007 to acquire Australian construction materials firm Rinker for $15.3bn, with a view to pay off the debt quickly.

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