AMERICAS: Cemex Completes Equity Offering, THE

Global Finance, Dec 2003 by Platt, Gordon

Monterrey, Mexico-based Cemex, a global cement producer, completed a non-dilutive equity offering designed to simplify its capital structure.

The company announced that it and certain holders of its American depositary shares sold a total of 29.3 million ADSs, including an over-allotment of 3.8 million ADSs to the underwriters. Citigroup Global Markets acted as global coordinator for the offering.

Proceeds received by Cemex and the selling ADS holders were approximately $660 million, after underwriting discounts and commissions. According to Cemex, some $538 million of the proceeds will be used to unwind several forward contracts entered into between Cemex subsidiaries and certain banks, including the selling ADS holders.The remaining $122 million, before expenses of the offering, was to be paid to Cemex.

The transaction did not increase the number of shares outstanding, and thus did not dilute shareholders.

Rodrigo Trevino, Cemex CFO, says the offering was in line with the company's objectives and stated financial strategy. "We believe this is an important step, and one of several we have taken during the course of the year, to simplify our capital structure," he says.