Bloomberg News

Cemex Latam Falls in Bogota After $1.14 Billion Initial Sale

November 16, 2012

Cemex Latam Holdings SA (CLH), the Central and South America unit of the largest cement maker in the Americas, fell in its first trading day after its 2.1 trillion peso ($1.14 billion) initial public offering.

Shares dropped 2 percent to 12,000 pesos at the close of trading in Bogota on volume of 304.9 billion pesos after the company issued 170.4 million shares at 12,250 pesos each, within the marketed range of 11,000 to 13,500 pesos. Demand for the shares was three times the amount offered, Chief Executive Officer Carlos Jacks said.

Cemex Latam, which is based in Madrid and listed on the Colombian stock exchange under the ticker CLH CB, will use funds from the initial public offering to pay down part of its debt with Mexican parent Cemex SAB. The IPO is Colombia’s third this year and the biggest since the government’s 2007 sale of a stake in Ecopetrol SA (ECOPETL), the Andean nation’s largest oil company, according to data compiled by Bloomberg.

“Demand in the local market was significant,” Jacks said today at an event in Bogota.

The offering raised $153 million in Colombia, the stock exchange said in an e-mailed statement.

The stock sale included 148.2 million shares offered to investors in Colombia and a concurrent private placement to outside investors, as well as an additional 22.2 million shares in a private placement that are subject to a put option granted to the initial purchasers.

Colombia Sales

Cemex Latam’s sales in Colombia, its largest market, rose 24 percent in the third quarter from a year earlier to $230.3 million, or about 60 percent of its total, as economic growth spurred residential and infrastructure spending, according to a report on its website. Panama is the company’s second-biggest market, with sales of $70.8 million in the quarter, according to the report.

Colombia’s economy expanded 4.9 percent in the second quarter from a year earlier, outpacing Brazil and Mexico, the region’s two largest economies. The growth was led by an 18 percent increase in construction and 8.5 percent rise in mining.

Shares in Cementos Argos SA (CEMARGOS), Colombia’s biggest cement maker, have risen 46 percent this year after profits rose 23 percent in the first nine months of the year.

Cemex Latam’s parent company is seeking to pay down debt after the U.S. housing slump prompted four ratings reductions and led to 12 straight quarterly losses, Maher Al-Haffar, Cemex’s investor relations chief, said in an interview this month. Debt reduction will consume “most if not all” of the expected proceeds from the unit’s IPO, Al-Haffar said.

The company’s proceeds from the sale could be reduced by as much as $145.5 million if the put options on the share overallotment are exercised, according to the prospectus.

The sale was led by BBVA Valores Colombia SA and Citivalores SA.

To contact the reporters on this story: Christine Jenkins in Bogota at cjenkins28@bloomberg.net; Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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