HeidelbergCement to improve financial structure

HeidelbergCement to improve financial structure
Published: 14 January 2009

HeidelbergCement plans asset sales as part of a sweeping effort to restructure its debts and bolster its capital base, it said on Tuesday.

The company said it would tackle its financing structure this year to prepare for debt maturing in 2010 linked to its $16 billion takeover of British builder Hanson two years ago.

"HeidelbergCement’s aim is to strengthen its equity capital base and to extend the maturities of its bank financing to improve its maturity profile," it said in a statement.

"For further deleveraging, HeidelbergCement plans the disposal of non-strategic assets," it added.

The company said it had picked Morgan Stanley as financial adviser.

HeidelbergCement said its restructuring was independent of the financial situation at majority shareholder VEM, the investment vehicle of dead German tycoon Adolf Merckle, who threw himself in front of a train last week.

"HeidelbergCement operates independently of VEM and recent events do not affect HeidelbergCement operationally," HeidelbergCement said, adding that there was no financial relationship beyond VEM holding shares in the company.

Credit rating agencies cut HeidelbergCement to speculative or ’junk’ status and said further downgrades were possible if the company did not restructure its finances.

Government economic stimulus packages around the world would lead to greater infrastructure spending and would benefit the company, HeidelbergCement said.