Cemex Holdings Philippines Inc., the local unit of Cemex S.A.B. de C.V. of Mexico, plans to use most proceeds from the planned P40-billion initial public offering to pay down debts.
Cemex Holdings said in a registration statement with the Securities and Exchange Commission it would use the net proceeds from the IPO to pay down the short-term loan from New Sunward Holding B.V. of $475 million, which it incurred in connection with the acquisition of operating subsidiaries.
The cement manufacturer also intends to pay or refinance long-term debt with NSH worth $353 million which the company incurred in connection with reorganization.
Cemex plans to sell up to 2.337 billion common shares at an offer price of up to P17 per share.
It said of the 2.337 billion shares, up to 1.423 billion shares worth P24.2 billion would be sold to overseas investors while the remaining 609.89 million shares worth P10.36 billion would be alloted to domestic investors.
Citigroup Global Markets Ltd., The Hongkong and Shanghai Banking Corporation Ltd. Singapore Branch and J.P. Morgan Securities Plc are the joint global coordinators and book runners while BDO Capital & Investment Corp. is the domestic lead underwriter.
Cemex Holdings said it planned to spend P2.4 billion in capital expenditures in 2016, including P600 million for maintenance of existing cement facilities.
This year’s capital spending is significantly higher than P1.04 billion it spent last year.
Cemex Holdings is a newly formed subsidiary of Cemex Asian South East Corp., which is wholly-owned by Cemex España S.A., which in turn is indirectly owned by Cemex, one of the largest cement companies in the world based on annual installed cement production capacity.
It operates two cement plants in the Philippines, with aggregate installed annual capacity of 5.7 million tons.
Apo Cement plant in Cebu has an installed annual capacity of 3.8 million tons of cement and serves customers in the Visayas and Northern Mindanao while Solid Cement plant in Rizal has an installed capacity of 1.9 million tons.
The company said it intended to install a new integrated cement production line which would add 1.5 million tons in annual capacity starting 2019.
