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.