Mexico says talks advance between Cemex and Caracas, Venezuela

Mexico says talks advance between Cemex and Caracas, Venezuela
Published: 18 September 2008

Mexico said that talks between Cemex and the Venezuelan government about a price for company assets expropriated by President Hugo Chavez are advancing positively.

"At this time we are in a negotiating space in which the company and Venezuelan authorities are working out the value of Cemex’s assets," Mexico’s Foreign Minister Patricia Espinosa said in a meeting with legislators.

"There are indications that things are advancing in a positive way," she said.

Chavez ordered the nationalization of the cement industry in mid-August and agreed to payout terms with Cemex’s rivals – Holcim and Lafarge – but could not reach a deal with Cemex.

Cemex asked for $1.3bn in compensation and Caracas offered US$650m.

After the two parties renewed talks at the end of August, Cemex  and Chavez’s government fixed a 60-day period to reach an accord on the cash that the Mexican company would receive

Analysts say the impact on Cemex of the expropriation is limited because its Venezuelan operations only generate about 4 percent of its earnings before interest, taxes, depreciation a and amortization, or EBITDA.