KKR to take control of Spain’s Cementos Balboa

According to Spanish press, Kohlberg Kravis Roberts (KKR) will take control of Cementos Balboa, part of Grupo Alfonso Gallardo. The group is the largest industrial firm in Extremadura, Spain, with regard to turnover and employees. KKR is involved in a refinancing programme for the group that will enable it to reduce its debt by €500 million. In addition to Cementos Balboa, KKR will take control of the group’s paper business, Papresa, allowing Grupo Alfonso Gallardo to focus on its core business – corrugated steel production.

In 2012 the group announced a restructuring process that aimed to strengthen its position in the steel sector, improve its financial standing and refinance its debt, which at the time stood at €1.5 billion.

Cementos Balboa is located in Alconera, Badajoz. The 1.6 million tpa plant began operating in 2005. Spain’s cement industry has suffered from the continued effects of the economic crisis and resultant reduction in construction activity. Domestic cement consumption fell to 10.98 million t in 2013 and consumption is forecast to decline by 7 – 8% in 2014. The country’s cement association, Oficemen, has repeatedly expressed its concern at rising electricity prices and the impact that this has had on the domestic cement sector’s competitiveness. Indeed, in December 2013, Grupo Alfonso Gallardo announced plans to halt production at its Spanish plants due to the ‘exorbitant electricity prices’.

Edited from various sources by Louise Fordham

Read the article online at: https://www.worldcement.com/europe-cis/02052014/kkr_to_take_control_of_cementos_balboa_129/