HeidelbergCement’s rights issue and share placing has apparently proved extremely popular with investors this week. Offered at a discount of some 12 per cent on the prevailing stock price of €44 the combined rights issue has raised over €4427m with the share placing amounting to €2115m reducing the debt accumulated by the Merckle family interests and now leaving them with just a 25 per cent stake in the group.
The rights issue should have also reduced the gearing level from 124.2% at the end of June to approximately 80%, which should remove the immediate strains on the balance sheet as capital investment continues in emerging markets. Eventually, the disposal of the non-cement and aggregates interests acquired with Hanson will improve the capital structure of the group, as will the impending sale of the sale of the Israeli concrete, aggregates and asphalt-based operations to Mashav for some €120m. Meanwhile Cemex is raising €1057m via the sale of participation certificates.
The sale of such certificates, rather than a traditional issue of equity will leave voting control firmly in the hands of the present Cemex family shareholders. The amount of fresh risk-bearing capital amount raised is almost exactly half of the €2115m that HeidelbergCement is raising in new equity, even though Cemex is somewhat more highly geared than HeidelbergCement. The Cemex issue is also smaller than the rights issues of Holcim (€1340m) and Lafarge (€1500.3m) earlier this year.
A quarter of the participation certificates are to be sold in Mexico and the rest elsewhere in the world, likely to be largely in the United States, where the group is one of the two largest cement producers.