Cemex says banks agree on refinancing deal

Cemex says banks agree on refinancing deal
Published: 23 December 2008

Cemex said on Monday its banks had agreed to refinance nearly US$2.2bn in debt maturing in 2009 and 2010, edging it away from default.

Cemex, under pressure from investors with slumping sales and US$6bn in debt maturing in 2009, said that debt will now be payable in February 2011.

Monterrey-based Cemex, which operates in more than 50 countries, said creditors had also agreed to extend almost half its US$3bn syndicated loan facility due in December 2009.

Investors have been worried the company might default amid the global financial crisis, tight credit conditions and lower cash flow as the U.S. housing crisis hits business in Cemex’s top market.
But the company said in mid-December it was making progress on its looming debt payments, calming shareholders’ nerves.

Cemex has a net debt of US$16.4bn and struggled earlier this month to lengthen maturities on US$418m in commercial paper, which was taken as a bad sign by the market.

"The refinancing process remains ongoing for maturities not yet committed to be extended," the company said.

Cemex added that exchange-rate fluctuations meant net interest expenses would be similar early next year. "Our net interest expense for the first half of 2009 is expected to remain flat versus the same period in 2008, at about US$500m," the company said.

Cemex’s troubles stem from its takeover last year of Australia’s Rinker, which increased the Mexican company’s presence in the United States just as the US housing company slumped and sparked a recession in the world’s top economy.