Cemex CEO says firm may sell some northern Europe assets to drive debt down

Mexican construction materials giant Cemex could sell part of its business in northern Europe, the Mediterranean and Asia as part of a debt repayment plan, the company’s CEO told Reuters news agency. Fernando Gonzalez said the firm could also sell 5 to 10% of its subsidiary Cemex Latam Holdings, and set aside 50% of its earnings from asset sales to lower its debt burden. Cemex recently revealed a plan to cut costs and sell assets to boost its finances and cut liabilities, in a bid to regain its invest
February 12, 2015 Read time: 2 mins

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Mexican construction materials giant 643 Cemex could sell part of its business in northern Europe, the Mediterranean and Asia as part of a debt repayment plan, the company’s CEO told Reuters news agency.

Fernando Gonzalez said the firm could also sell 5 to 10% of its subsidiary Cemex Latam Holdings, and set aside 50% of its earnings from asset sales to lower its debt burden.

Cemex recently revealed a plan to cut costs and sell assets to boost its finances and cut liabilities, in a bid to regain its investment grade rating.

The firm has struggled with large debts and cost-cutting since former CEO Lorenzo Zambrano's ill-timed $16 billion takeover of Australian rival 3583 Rinker in 2007, when the United States housing market was already months into a downturn.

Its credit rating was downgraded by Standard & Poor's and Fitch Ratings and now stands at B-plus, which is four notches below investment grade.

Gonzalez also said Cemex could reach an EBITDA target of US$4.7 billion in 2018, adding that he sees a rise of 10 to 12% in the price of its products in the US.

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