Mexico’s Cemex surges on debt refinancing hopes

Mexico’s Cemex surges on debt refinancing hopes
27 November 2008

Shares in Mexico’s Cemex surged on Wednesday on optimism that the company may be nearing a deal to refinance part of the payments on $6.6 billion in debt due next year, analysts said.

The company’s shares rose 16.76 per cent to 8.08 pesos. Its stock traded in New York gained 20.83 percent to $6.15.

Investors’ worried that Cemex would struggle to refinance amid tight global credit conditions and falling sales volumes in its U.S. An d European markets.

Cemex entered talks with five banks to refinance part of its debt earlier this month.

"They may be getting closer to reaching something," said Carlos Peyrelongue, a cement industry and construction analyst at Merrill Lynch in Mexico City.

By Friday, the stock had lost about 40 percent since the end of October, hitting its lowest price since early 1999.

"There is no specific news, but we all know that they are working on the restructuring," said Gonzalo Fernandez, an analyst at Santander in Mexico City. (Reporting by Michael O’Boyle in Mexico City and Gabriela Lopez in Monterrey, editing by Leslie Gevirtz)
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