Cemex board okays capital stock increase
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Wed, 03 Apr 2019 16:14:57 +0000
CEMEX Holdings Philippines Corp. plans to increase its authorized capital stock from P5.2 billion to P18.3 billion to fund its capital needs.
In a regulatory filing on Wednesday, the listed cement manufacturer said its board of directors approved the move to add more shares, which have a par value of P1 apiece.
The plan is yet to be approved by Cemex shareholders and the Securities and Exchange Commission. If approved, the company will hold an equity offering to raise as much as P13 billion.
Proceeds will be used to improve its capital structure and fund the ongoing expansion program of subsidiary Solid Cement Corp.
“Following this capital-raising exercise, unissued shares will be kept in the form of authorized but unissued share capital, and the [c]orporation currently has no plans for any further fundraising,” Cemex said.
Despite the announcement, Cemex shares plunged by 40 centavos or 15.04 percent to finish at P2.26 apiece on Wednesday.
Timson Securities Inc. trader Jervin de Celis said investors sold off as the capital increase would have a dilutive effect on their shares after the firm emphasized that the equity offering would not be limited to a rights offer.
“Some support levels were also broken (P2.50 and P2.40) as investors with a large number of shares sold their position. [T]his exacerbated the selling activity, which brought down the price of the stock to its intra day low of P2.19,” he explained.
In February, Cemex told the bourse that it swung to a net loss of P930 million in 2018 and P325 million in the fourth quarter alone, compared with a P659-million profit in 2017 and P325-million loss in the last three months of that year.
It blamed the loss to a deadly landslide in Naga City, Cebu province last September and an increase in the cost of raw materials in October-to-December.
This despite revenues rising by 7 percent to P23.4 billion last year from P21.8 billion in 2017, and by 6 percent to P5.5 billion in the last quarter from P5.2 billion year-on-year.
A subsidiary of Cemex Asian South East Corp. that was incorporated on Sept. 17, 2015, Cemex Holdings Philippines primarily sells gray ordinary Portland cement, masonry or mortar cement, blended cement and ready-mix concrete.
It markets and sells these under the Island and Rizal brands in Luzon and the Apo brand in the Visayas and Northern Mindanao.
The post Cemex board okays capital stock increase appeared first on The Manila Times Online.