Cemex said Tuesday that it plans to offer US$1.2bn in convertible notes and use the money to pay down debt.
Cemex said it plans to offer US$600m in notes due 2016 and US$600m in notes due 2018, as well as giving underwriters 30-day overallotment options for US$90m of each of the two series. The notes will be unsecured and subordinate to Cemex’s senior debt.
The plan to issue equity via convertible securities has weighed on Cemex’s share price since the company announced the plan in January. Shareholders approved it Feb. 24.
Cemex officials say shareholder dilution will be eliminated by the savings on interest payments and by increased cash flow per share in the future. By paying down US$2.3bn in debt this year, Cemex says it will save US$200m a year in interest costs.