Mexico’s Cemex eyes $2 billion of debt reduction by 2017, says CFO

By Lisa Kerner

Charlotte, N.C., March 17 – Cemex SAB de CV chief financial officer José Antonio González said the company would like to lower its debt by $1 billion in each of the next two years.

The company used cash on the balance sheet and free cash flow to help reduce its debt by $2.1 billion over the past two years, said González during the company’s investor day presentation on Thursday.

At year end, Cemex had about $15 billion of debt and $628 million of free cash flow.

González would also like to see Cemex’s current leverage of 5.2 times to go below three times.

Cemex does not want to have any significant refinancing risk at any time, but wants to be in position to tap the markets when it doesn’t have to, according to González.

The company’s financial strategy includes reducing refinancing risk, lowering financial costs, minimizing dilution and delevering, with the objective of recovering its investment-grade capital structure.

Cemex has extended its $3.8 billion bank debt until 2020 and lowered the interest rate. In addition, the company has refinanced $11 billion of its high-yield notes, for cash interest savings of $224 million.

González said Cemex has a very manageable debt maturity profile.

The average debt maturity is 5.1 years and the average cost is 5.9%, according to the presentation.

Cemex is a cement producer based in Monterrey, Mexico.

© 2015 Prospect News.
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