Cemex reported Monday that it closed the previously announced sale of certain UK assets to the Breedon Group for approximately $ 230 million.
The amount includes about $ 30 million of debt.
Assets generated nearly $ 29 million of EBITDA in 2018.
According to Intercam Banco, with the above, Cemex strengthens its financial position and adjusts to what is stated in its program of sale of assets of between 1,500 million and 2,000 million dollars, with the sale of its white cement business only pending, except in Mexico and the United States, for a price of 180 million dollars, including the white cement plant in Buñol, Spain.
This last pending transaction is subject to authorization from Spanish authorities, but Cemex would expect to be able to close the sale during the second half of 2020.
With the resources received, the company will be able to lower its level of net leverage, so its Consolidated Fund Debt / EBITDA ratio will drop from 4.57x to 4.47x after receiving the resources from this transaction.
As long as Cemex maintains a leverage level of less than 5.0x, the margin applicable to its debt will be identical to the one it had prior to the modification of its financial limits.
For their part, as long as the leverage is below 4.5x, they will be able to use their share repurchase fund.
Regarding the exit multiple, the company managed to finalize the transaction at a multiple of 7.93x EV / EBITDA 2018, which we consider positive as well as strategic, given Cemex’s need to strengthen its balance sheet in an environment of uncertainty. Cemex’s EV / EBITDA multiple is currently at 7.2x.
Finally, the company will increase its cash position from $ 2,832 million to $ 3,032 million, which contrasts with the maturities of its debt of 528 million in 2020 and 999 million in 2021, the most important maturity being in 2022 for 2,561 million. of dollars.
The company reported net sales of $ 2.912 million in the second quarter of 2020, a year-on-year drop of 14 percent.
The drop is equivalent to 10% in local currency terms, compared to the second quarter of 2019.
At the same time, operating EBITDA decreased 11% to $ 554 million during the second quarter of 2020 compared to the same period last year, a decrease of 6% in comparable terms for ongoing operations and the adjustment by exchange fluctuations.