Cemex may default on $19bn debt

Mexico’s Cemex, the world's third-biggest cement maker, said on Tuesday it would default on its close to $19 billion (Dh70 billion) debt unless it is able to get affordable refinancing agreements.

"If we are unable to refinance on favorable terms, or get nothing at all, we will not be able to meet our upcoming debt obligations, Cemex said in a statement addressed to the US Security and Exchange Commission.

Cemex said it could also "incur more debt in future."

Cemex's total outstanding debt is $18.78 billion – $6.9 billion in short-term obligations and $11.85 billion in long-term debt.

The amount includes $3.02 billion of "perpetual obligations" that Mexico does not consider debt but the United States does.

Cemex last month said it was able to refinance only $4 billion of its debt.

To renegotiate the rest of the debt, Cemex acknowledged it was handicapped by poor report cards issued by US ratings agencies Standard & Poor's and Fitch Ratings.

It also said its business operations are feeling the negative impact of the global economic crisis, and that infrastructure boosting plans announced by several countries, including the United States, were too little too late for Cemex.

With facilities in 50 countries, Cemex said it hopes to save $700 million by cutting 10 per cent of its staff and slashing $550 million from its investment fund.

 

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