Cemex Plots Equity Sale

Cemex has approved the issue up to 1.6bn CPO shares through either a public share offer or via a sale of convertible bonds. The troubled Mexican cement maker is raising capital to comply with the terms of its recent $15bn restructuring, in which it faces higher spreads if it does not raise $1bn in equity by June 2010. Cemex does not state how much it expects to raise, but a sale of 1.6bn CPOs would raise just over $2bn, at Monday’s closing price of MXP17.08. The company does not indicate who would manage the sale or when it would take place. In August, Cemex finalized a workout that terms out shorter maturities to 2014. The interest on the new debt of Libor plus 450bp can increase if Cemex does not meet a strict debt repayment schedule. This includes raising $1bn in equity by next June to meet 2010 amortizations of more than $2.2bn if it hopes to avoid a $100m fine and a 75bp margin increase. Equity desks with an array of financing options have aggressively pitched Cemex, say bankers close to the issuer. Citi and Santander are among two of the company’s leading lenders, and they appear best positioned to gain lead roles on an upcoming issue.