North / South America
Cement maker Cemex launches debt refinancing plan
Jun, 26 2012
(MEXICO CITY) -- Cemex proposed on Monday to refinance debt due in 2014 as the Mexican cement maker tries to stem heavy losses triggered by the U.S. housing crisis, and its shares rose more than 5 percent.
The company said in a statement that it would propose a three-year extension of debt maturing in February 2014, to February 2017, and planned to pay down $1 billion of debt in 2013, perhaps through some asset sales.
Monterrey-based Cemex, which was swamped by the 2008 U.S. housing meltdown shortly after paying out some $16 billion to buy Australia's Rinker, has been working its way out of its deep debt troubles for the past three years.
"The news seems very favorable since it tackles one of the main worries the market has about the company, given the economic recovery has been delayed more than originally expected," analysts at Mexico's Banorte wrote in a report.
The company said it had meetings scheduled with its lenders on June 29 and July 2 to discuss the refinancing proposal, which was negotiated with a number of its banks.
The proposal also includes an upfront fee and revised margin, the statement said.
Most of Cemex's debt commitments for this year have been covered. But in late 2013, some $572 million falls due before hitting a peak in 2014, when more than $8 billion in various debt instruments mature.
Debt has exacerbated problems at Cemex, which has posted annual losses for the past two years. In 2011 the net loss was $1.5 billion, and total debt plus perpetual notes rose by 2 percent to $18.1 billion.
"We expect this news to have a positive impact on the shares," wrote Banorte's analysts.
Cemex shares were up 5.4 percent at 8.35 pesos in morning trading on Mexico's stock exchange.
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