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Sept. 30 (Bloomberg) -- Cemex SAB, the largest cement maker in the Americas, plunged a record 56 percent in the third quarter on concern a global economic slowdown will crimp demand for the company’s products.
Cemex slumped 6.3 percent today to 4.44 pesos in Mexico City, a 12-year low, as of 4:15 p.m. New York time. The quarterly decline was the stock’s worst performance since Bloomberg records dating back to 1992.
Global stocks fell today, dragging the MSCI All-Country World Index to its biggest quarterly loss since 2008, as declines in Chinese manufacturing and German retail sales signaled less demand for the construction materials the company makes. Investors are also concerned the company won’t be able to meet its debt obligations, Carlos Hermosillo, head of equity research at Grupo Financiero Banorte SAB, said today.
“The quarterly fall has been dramatic,” Hermosillo said today in a telephone interview from Mexico City. “The company hasn’t convinced investors that its outlook isn’t as bad as it appears.”
Chief Executive Officer Lorenzo Zambrano said yesterday the Monterrey, Mexico-based company plans to sell about $1 billion of assets by the end of 2012 to reduce debt. Cemex, which had $17.8 billion in debt at the end of the second quarter, will meet bank covenants for 2011 and 2012 without renegotiating or selling equity, Zambrano said.
Cemex had obtained a $15 billion bank loan in August 2009 to avoid default after U.S. cement demand plummeted following the company’s $14.2 billion acquisition of Rinker Group Ltd., which had more than 80 percent of sales in the U.S.
--With assistance from Thomas Black in Monterrey. Editors: Brendan Walsh, Glenn J. Kalinoski
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