Dallas, Texas 03/12/2014 (FINANCIALSTRENDS) – Mexican Cement manufacturing firm Cemex SAB de CV (ADR)(NYSE:CX) has disclosed that its board of directors has decided to convert “Convertible Subordinated Notes” which are being held by institutional investors and who’s principal adds up to $280 million with a 2015 due date into American Depository Shares which will equate to around 27.6 million shares in number. In lieu of the exchange, the cement firm is not paying out any additional cash to the holders of these notes.
With the retiring of these latest notes, the firm disclosed that “Convertible Subordinated Notes” of only $435 million would be pending payment and these would have a maturity date of 2015 March. Explaining the rationale behind this ahead of schedule conversion of the notes Cemex SAB de CV (ADR)(NYSE:CX) Chief financial officer and Executive Vice President of Finance and Administration Fernando A. González has been quoted to have said that, “This transaction contributes to the strengthening of our capital structure. It supports our stated objectives of reducing debt and interest costs and reduces our short term contingent refinancing requirements.”
More good news about the company’s strong financial and operational condition came in the form of ratings upgrade by hard to please analysts at Credit Suisse. Its top trade gurus Vanessa Quiroga and Santiago Perez Teuffer have gone on record to state that the Mexican firms earnings before tax could outpace its revenue growth by 2 times in the near future thanks to its strong debt to equity ratio, coupled with a better than expected cash savings of close to $1.2 billion since 2007. The trading house goes on to add that without any significant increase in its cap ex, the cement manufacturer can easily increase its production to meet requirements up to 2017 time frame and foresees greater margins increase as the cement maker goes in for outsourcing of noncore operations and leverages more cost effective alternate fuels.