Mexico’s Cemex eyes $855-M IPO in the Philippines

MANILA, Philippines – Cemex Holdings Philippines, Incorporated, the local unit cement unit of Mexico’s Cemex SAB De CV, is raising as much as P39.74 billion ($855 million) in what could be the biggest initial public offering (IPO) in the Philippines, as the outlook on domestic economy remains positive.

Based on the registration statement filed with the Securities and Exchange Commission, Cemex Holdings plans to sell 2.337 million common shares at an offer price of up to P17 ($0.366) per share.

Cemex is a global building materials company and has presence in more than 50 countries.

The company hired Citigroup Global Markets Limited, the Hongkong and Shanghai Banking Corporation Limited, and JP Morgan Securities Public Limited Company as the joint international underwriters.

BDO Capital and Investments Corporation is the domestic lead underwriter for the offering.

In a disclosure to the New York Stock Exchange, Cemex said the filing of the registration statement with the Philippine SEC is a first step in one of the alternatives the group is exploring in the context of its previously announced asset divestiture plan. 

“Cemex continues to explore other alternatives, and the ultimate implementation of any such alternative remains at the discretion of Cemex,” it said.

The country’s biggest share sale was launched in 2013 when the LT Group Incorporated of Lucio Tan, the country’s second-wealthiest man, raised P37.72 billion ($811.60 million) through follow-on offering.

Cemex Holdings’ assets consist primarily of cement manufacturing assets in the Philippines with total capacity of 5.7 million tons.

Cemex initially entered the Philippine market in 1997 with a minority investment of 30% in Rizal Cement Company, Incorporated, a company which was established in November 1930. 

At the time of its initial investment, Solid Cement was a subsidiary of Rizal Cement. But eventually Rizal Cement was merged with Solid Cement.

In 1999, Cemex, together with other investor, bought an aggregate 99.9% interest in APO Cement.

In May 2015, Cemex announced that it was undertaking a new $300 million investment in the Philippines. 

The new investment will include the construction of a new 1.5-million-ton, integrated cement-production line at Cemex’s Solid Cement plant in Luzon. 

This will double the capacity of the Solid Cement plant and will represent a 25% increase in the company’s cement capacity in the Philippines.

Aside from Cemex, other big cement players in the domestic industry include Holcim Philippines and Republic Cement & Building Materials Incorporated – formerly Lafarge Republic Incorporated – which is now owned by AEV-CRH Holdings Incorporated.

Cement companies in the Philippines are currently expanding their capacities as demand remains strong both from the public and private sector.

The Cement Manufacturers’ Association of the Philippines last month reported cement sales in 2015 rose 14.3% to 24.36 million tons from 21.3 million tons recorded the previous year. – Rappler.com

$1 = P46.48