Cemex expects 4Q loss from Australia sale

Cemex expects 4Q loss from Australia sale
Published: 03 December 2009

Cemex  said on Wednesday it sees a US$446m loss from the sale of its Australian assets and could also challenge a Mexican tax reform in the courts.

"As a result of the sale of our Australian operations we expect to record an extraordinary loss of 6,021 million pesos (US$446m) in the fourth quarter of 2009," the company said in a filing to the U.S. Securities and Exchange Commission.

Cemex weighed down by falling sales and US$15bn in debt, sold its Australian operations to rival Holcim for US$1.76bn in June, or about half what it paid for them in 2007.

Cemex suffered from a poorly timed purchase of Australia’s Rinker in 2007, which made it the top cement maker in the United States but came as the global financial crisis hit.

Monterrey-based Cemex said in the same SEC filing that Mexico’s 2010 income tax increases are unconstitutional and the company could take the government to court.

"We believe this tax reform violates the Mexican Constitution and that we have substantial grounds to contest the constitutionality of this new law," the company said.

Cemex, which also competes with Lafarge, won a refinancing deal on its bank and bondholder debt in August and narrowly avoided default as the global economic slump slashed its sales. (Edited report from Reuters).