Cemex offering to generate US$260m

Cemex offering to generate US$260m
14 September 2005

Cemex has already significantly increased the efficiency of the UK’s RMC after buying it last year, is offering 31m shares after its stock price rose by two-thirds since the acquisition was announced.  

The non-dilutive offering, which represents about Dollars 1.6bn or 9 per cent of outstanding shares, would generate about Dollars 260m of profits for Cemex at its current share price.  

Although analysts expect Cemex’s share price to fall further in the short term, Carlos Peyrelongue, head of Merrill Lynch in Mexico City, said: "In the medium term Cemex chose the best option for both the company and its shareholders as the deal doesn’t involve a large tax implication which a buy-back would have."  

The proceeds are being used to pay for expiring forward contracts. "It makes sense to unwind equity forwards to get rid of that liability, while making profits at the same time," said Mr Peyrelongue, adding that Cemex would use this to reduce debt.

Published under Cement News