With the imminent exercise of the put option held by the privately owned Ready Mix USA, Cemex will have to pay Ready Mix USA about US$350m and also consolidate some US$28m of the joint-venture’s debt.
Ready Mix USA had given notice last year that it intended to exercise this option upon the expiry of the five years of the joint-venture agreement. It follows the US cement market having declined in every single year since the joint venture has formed and in 2008 and 2009 the drop was well into double figures (-15.4% and –26.3% respectively). No meaningful recovery is US cement demand is being forecast before 2013
The assets subject to the put option cover Ready Mix USA’s share in the Demopolis, Alabama and Chinchfield, Georgia cement works and downstream assets, which at the end of last year consisted of 187 batching plants, 10 quarries and a number of block plants.
An announcement of the approximate amount of the increase in the debt was made on the 12th August, after North American markets had closed.