CEMEX Holdings Philippines Inc. has allotted $300 million in capital spending for the next three years to ramp up production capacity in the country.
Vincent Paul Piedad, Cemex country and Asia director for Business Service Organization and Procurement, said $37 million will be spent this year to expand its cement facility in Antipolo City.
“The normal capex that we have is about P600 to P650 million per year, but because of the expansion the capex that we have for 2016 is about $37 million,” Piedad said.
Last year, the firm spent P1.046 billion, of which P907 million was for operations and the improvement of its Apo cement facility in Cebu.
Cemex is doubling the capacity of Solid Cement in Antipolo City from 1.5 million tons to 3 million tons by building a new integrated cement-production line.
This would increase the firm’s capacity by 25 percent, the firm said.
“This is part of the $300 million, so it is going to be staggered from this year to 2019,” Piedad said.
He noted that the $300 million would be sourced from internal funds, while the proceeds from its forthcoming initial public offering (IPO) will be used to prepay debts.
A unit of Mexico’s CEMEX SAB De CV, Cemex, is offering some 2.03 billion common shares with the option to sell an additional 304.94 million if the IPO is oversubscribed.
The price of its IPO shares was lowered from P17 to P10.75 apiece.
The company intends to raise some P25.04 billion, lower than the previous estimate of close to P40 billion, but still one of the biggest IPOs in the country.
The offer period is scheduled to start from today, July 4, to 11. The listing date could take place a week after the last day of the offer period.
Proceeds from the IPO will repay some $504 million of the company’s short-term and long-term loans from Sunward Holdings BV.
The loan was secured with the acquisition of its operating units Apo Cement Corp. and Solid Cement Corp. as part of a reorganization.
The debt carries an interest rate of 5.21 percent a year, and would fall due and demandable on July 9, but renewable in September and December, according to Cemex’s registration statement.
The company has several long- and short-term loans that carry a 7.535 percent interest rate. Some $35.3 million would fall due and demandable in 2020, and $105.9 million each in 2021, 2022, and 2023.
BDO Capital and Investment Corp. will serve as domestic lead underwriter, while the joint global coordinator and joint bookrunners are Citigroup Global Markets Ltd.-United Kingdom, J.P. Morgan Securities PLC-UK, and The Hongkong and Shanghai Banking Corp. Ltd.-Singapore Branch.