Building materials supplier Cemex S.A.B. de C.V. (CX) said Thursday that it completed the sale of its Australian operations to Switzerland-based building materials group, Holcim Group, for about A$2.02 billion or about US$ 1.7 billion. The sale, which includes Cemex's 25% stake in Cement Australia, is part of the company's efforts to save costs and reduce debt.
Cemex's divesting assets total 348 facilities located throughout Australia, consisting of 249 ready-mix concrete plants, 83 aggregates quarries and 16 concrete pipe and products plants. The company's Australian operations, Cemex Australia, had generated fiscal 2008 revenues of about A$1.86 billion, while yearly EBITDA was A$313 million.
In August last year, Cemex had said that it is exploring sale of its 16 concrete pipes and products manufacturing facilities located throughout Australia, and the sale proceeds would be used for debt reduction.
According to Cemex, the deal is part of its overall strategy to improve its financial flexibility, which includes refinancing of US$15 billion of debt and the global offering of 1.495 billion Ordinary Participation Certificates, including the over-allotment option, with estimated net proceeds of US$1.782 billion.
Cemex is struggling under a heavy debt load following its acquisition of Australia's Rinker last year. The credit crisis and a decline in demand for its products added to the company's troubles.
In July, the company presented a plan to refinance its bank debt of about US$14.5 billion. The key component of the proposed refinancing plan was to reschedule the debt, which the company must pay through 2011, to February 2014. The company later said that its creditors have supported the refinancing plan.
CX is currently trading at $12.50, down 42 cents or 3.25% on a volume of 10.72 million shares.
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