Cemex forms an Asian holding firm

Cemex forms an Asian holding firm

MEXICO CITY (Reuters): Mexican cement producer Cemex on Monday said it was forming an Asian holding company with $950 million in start-up capital to oversee its businesses in that part of the world, possibly auguring further expansion in the region.

Cemex Asia Holdings (CAH), a subsidiary of Monterrey-based Cemex SA de CV, "was created to take advantage of investment opportunities in cement assets in Asia," Cemex said in a statement issued through the Mexican stock exchange.

Cemex has bought cement assets in the Philippines and Indonesia in recent years, leaving industry analysts wondering when the company might go shopping in the region again.

"They have talked about Thailand and Malaysia, and once they talked about Vietnam, apart from the Philippines and Indonesia," said Carlos Pena, an analyst with Afin Securities.

Cemex has become the world's third-largest cement company with other acquisitions in Europe, the United States and throughout Latin America.

"This accord marks an important step in our financial strategy, designed to support Cemex's business plan in Asia," Cemex Chief Financial Officer Rodrigo Trevino said in the release.

"We will continue analysing opportunities for growth in the region and the formation of Cemex Asia Holdings gives us the financial flexibility to pursue attractive investment alternatives."

The new Asian holding company was formed with $150 million from two large institutional investors -- AIG Asian Infrastructure Fund II L.P., which specialises in investment in Asian infrastructure projects, and GIC Special Investments Pte Ltd., a subsidiary of the Government of Singapore Investment Corp. (GIC), which manages Singapore's reserves for long-term investments.

Cemex said it would put up the other $850 million.

Cemex Asia Holdings will use the start-up funds to acquire from Cemex SA de CV its stakes in Rizal Cement and APO Cement, two Philippine companies in which Cemex is majority owner.

As a result, Cemex's stake in Rizal will fall to 59 percent from 70 percent, while the Cemex stake in APO will fall from 99.9 percent to about 84 percent, the company said.

Those deals are expected to be completed by the end of the third quarter, and Cemex SA de CV will use the cash to reduce debt, the company said.

Cemex, which has annual sales of about $4.5 billion, listed about $5 billion in debt at the end of the first quarter, roughly half its total assets.