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Home Africa

InterCement’s European, African unit to be valued at US$1.8B in IPO – sources

FurtherAfrica by FurtherAfrica
August 1, 2018
in Africa, Banking, Capital Market, Cement, Development, Economy, Finance
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Brazil’s InterCement Participações SA, one of Latin America’s largest cement producers, plans an initial public offering of its operations in Europe and Africa early next year, two sources with knowledge of the matter said this week.

Camargo Correa SA, the controlling shareholder in InterCement, expects its operations in Portugal and African countries to be valued at 1.5 billion euros ($1.76 billion), the people said, asking for anonymity because decisions are still private.

Camargo has been selling assets over the last three years since its engineering unit became the first Brazilian conglomerate to admit to bribing politicians and commit to pay a settlement as part of the country’s largest-ever corruption probe.

Banks will probably be hired to manage the InterCement unit’s IPO over the next few months, the sources said, adding that four European exchanges are under consideration for the listing: London, Frankfurt, Amsterdam and Lisbon.

Camargo had initially expected to list the unit this year, but volatility related to Brazilian presidential elections has postponed the expected date to 2019.

InterCement is now working on a new corporate structure for its operations in Portugal and countries such as Egypt, South Africa and Mozambique. InterCement would sell up to 49 percent of the unit which will group the activities in these countries, the sources added.

Last year, InterCement delisted its Portugal subsidiary Cimpor Cimentos de Portugal SA, acquired six years ago, from the Lisbon Stock Exchange, since the stock had lost liquidity since the acquisition.

Camargo Correa wants proceeds from the listing in Europe to be used to reduce debt and invest in modernizing its Brazilian mills, which have been suffering with the shrinking of the local cement market.

The industry’s cement sales in Brazil fell 6.5 percent last year and are yet to recover this year. Cumulatively, they are down 25 percent since 2015, according to industry data. Many of the 20 cement makers in the country are operating at half of their capacity, the sources said.

In a statement to Reuters, InterCement confirmed the IPO plans. “InterCement is considering an IPO of its assets in Portugal and Africa, proceeding with the deleveraging process that has been publicly announced,” the company said.

Since the leniency agreement with prosecutors in 2015, Camargo has sold its controlling stake in power holding company CPFL Energia SA (CPFE3.SA) to China’s State Grid Corp for 5.9 billion reais ($1.6 billion) last year, and shoe maker Alpargatas SA to Itaúsa Investimentos SA for 2.7 billion reais ($724 million) in 2015.

InterCement has already raised $954 million with the successful listing of its Argentinian unit Loma Negra Cia Industrial Argentina SA (LOMA.BA) in November, in a dual listing in Buenos Aires and New York.

Source: Reuters

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