Cemex Holdings Philippines Inc. said unit Solid Cement Corp. has availed of a $75-million loan facility from CEMEX Asia, B.V. to fund partially the construction of a 1.5-million metric ton cement plant in Antipolo, Rizal province.
Cemex Holdings said in a disclosure to the stock exchange Solid Cement made an initial drawdown on the loan equivalent to approximately $40.7 million
The company is using the proceeds of the loan to finance general corporate activities, including refinancing debt and funding the construction and installation of a new cement production line at Solid’s cement plant in Antipolo City.
The $75-million revolving fund facility will have a tenor of six years and will carry a fixed interest rate, depending on the cement firm’s consolidated leverage which will range from 8.2 percent to 10.2 percent a year.
Solid Cement is entitled to prepay the loan with any other proceeds at any given time and with no penalty.
The planned cement expansion, which is estimated to cost $235 million, is scheduled for completion by 2020.
The project is expected to boost Cemex’s total capacity in the country by 26 percent. Solid Cement currently has a capacity of 1.9 million metric tons and serves the markets of southern Luzon and the National Capital Region.
Solid Cement earlier signed project agreements with China’s CBMI Construction Co Ltd. for the procurement, construction, and installation of the new line.
Cemex Philippines last week reported it was shutting down its Davao cement terminal and suspending indefinitely the operation of one of its two kilns in Cebu province, following the suspension of quarrying operations.
The closure would also force the company to lay off 30 percent of its workforce and cut the services of 40 percent of contractors.
Company officials said the continued suspension of the quarry operations of Apo Land & Quarry Corp., a principal raw material provider of Apo Cement, was the deciding factor in the closure of the facilities.
The Environment Department earlier suspended quarrying activities in Central Visayas after dozens of people died from a landslide in September in Naga City, Cebu, where Apo Land had mining rights.
The Davao terminal holds and dispatches 25,000 bags on a daily basis.