Cement manufacturer Cemex Holdings Philippines Inc. plans to raise up to $250 million from stock rights offering to fund expansion projects.
CHP said in a disclosure to the stock exchange its board of directors approved the rights offering which would come from the proposed increase in the company’s authorized capital stock to P18.31 billion from P5.19 billion.
The rights offering is subject to the approval of the Securities and Exchange Commission and the Philippine Stock Exchange.
The company authorized certain members of its senior management to set the terms and conditions of the rights offering, including the entitlement ratio, the offer price, the payment terms, the procedure for lodging the application to subscribe, the details and procedures for the various rounds of offer and the record date.
CHP failed in June to secure the required two-thirds of votes from shareholders to increase its authorized capital stock to P18.31 billion from P5.2 billion, which would have enabled the company to raise fresh funds to finance expansion and improve its capital structure.
CHP was looking to conduct an equity offering at that time.
CHO said to implement the proposed rights offering, it would hold another stockholders meeting on Oct 16. to approve the planned capital hike.
Proceeds from the planned fundraising activity will be used to finance the expansion of Solid Cement plant in Rizal, improve its capital structure and provide balance sheet flexibility.
CHP is currently constructing another cement line in Antipolo City that is capable of producing 1.5 million metric tons annually.
The $235-million expansion plan is expected to increase CHP’s cement capacity by 26 percent. The new line is seen to be operational by the fourth quarter of 2020.
CHP programmed P7.75 billion in 2019 capital expenditures primarily to fund the Solid Cement plant expansion. Jenniffer B. Austria
Solid Cement is producing 1.9 million metric tons of cement and is serving the markets of southern Luzon and the National Capital Region.
CHP reported a net income of P802 million in the first half of 2019, a turnaround from P585-million net loss recorded in the same period last year as sales rose 4 percent to P12.4 billion.
