By James A. Loyola
Solid Cement Corporation (SOLID), an operating subsidiaries of Cemex Holdings Philippines, Inc. (CHP), is borrowing US$75 million from a related company to refinance debt and fund its expansion program.
In a disclosure to the Philippine Stock Exchange, CHP said Solid has availed of a subordinated revolving credit facility from CEMEX Asia B.V.
The proceeds of this facility will be used for general corporate purposes including the refinancing of existing debt and the funding of the construction and installation of the 1.5 million metric tons per year expanded/new integrated cement production line at Solid’s cement plant located in Antipolo City, Rizal.
Solid has also made an initial drawdown on this facility equivalent to approximately US$40.7 million.
The firm is investing US$235 million for the construction of a new integrated cement production line and has entered into the principal project agreements with CBMI Construction Co., Ltd. of China for the procurement, construction and installation of the facility.
The new integrated cement production line will represent a 26 percent increase in CHP’s cement capacity in the Philippines. CHP currently estimates the new line to start operations by the fourth quarter of 2020.
CHP expects that the investment in the new line could be sourced from one or any combination of the following options: Free cash flow, debt from any subsidiary of CEMEX, S.A.B. de C.V. (the ultimate parent company of CHP), debt from one or more financial institutions or proceeds from one or more capital market transactions.