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Cemex announces completion of its 2012 financial plan

World Cement,

Cemex has announced the completion of its financial plan for 2012, which included several transactions to refinance and/or prepay debt scheduled to mature through 2014, thereby increasing the company’s financial flexibility and significantly reducing its refinancing risk.

“During 2012, we took decisive steps to improve our debt maturity profile and strengthen our capital structure. We have now addressed all our required amortisations under the New Facilities Agreement until February 2017. Today, we are not only in a better shape financially, but we are also much more agile and flexible operationally. In addition, we have fully implemented our transformation project and other cost containment initiatives, which have translated into higher profitability,” said Fernando González, Executive Vice President of Finance and Administration.

Under the plan, Cemex reduced the amount of debt maturing through March 2015 to about US$650 million, at currently prevailing foreign-exchange rates, of which approximately US$600 million matures during the first quarter of 2014. In addition, the average life of debt increased to 5.6 years, from 3.8 years at the beginning of this year, with no significant change in yearly interest expense.

The execution of the 2012 financial plan included various transactions, including:

  • Refinancing of close to US$6.7 billion of debt under the Financing Agreement, into a new Facilities Agreement with a final maturity in 2017 and US$500 million of new senior secured notes due in 2018. The New Facilities Agreement aims to provide the company with more flexible operating and financial covenants.
  • Issuance of US$940 million in new senior secured notes maturing in 2019 in exchange for approximately US$452 million in perpetual debentures and US$619 million in 2014 Eurobonds, resulting in a reduction of Cemex’s overall indebtedness of US$131 million.
  • Issuance of US$1.5 billion of new senior secured notes due in 2022.
  • Initial share offering of a 26.65% minority position in Cemex Latam Holdings, S.A. (CLH), resulting in net proceeds of about US$960 million.

Proceeds from the 2022 Notes and CLH’s initial share offering were used to prepay debt under the New Facilities Agreement and the Financing Agreement. As a result of these prepayments, the spread over 3-month LIBOR on the New Facilities Agreement was reduced to 450 basis points, the same spread Cemex had under the original Financing Agreement while, as a result of the refinancing of this agreement, the final maturity of this debt was extended by three years.

Adapted from press release by Louise Fordham.

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