Cemex CEO says firm may sell some northern Europe assets to drive debt down

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Mexican construction materials giant 643 Cemex could sell part of its business in northern Europe, the Mediterranean and Asia as part of a debt repayment plan, the company’s CEO told Reuters news agency.

Fernando Gonzalez said the firm could also sell 5 to 10% of its subsidiary Cemex Latam Holdings, and set aside 50% of its earnings from asset sales to lower its debt burden.

Cemex recently revealed a plan to cut costs and sell assets to boost its finances and cut liabilities, in a bid to regain its investment grade rating.

The firm has struggled with large debts and cost-cutting since former CEO Lorenzo Zambrano's ill-timed $16 billion takeover of Australian rival 3583 Rinker in 2007, when the United States housing market was already months into a downturn.

Its credit rating was downgraded by Standard & Poor's and Fitch Ratings and now stands at B-plus, which is four notches below investment grade.

Gonzalez also said Cemex could reach an EBITDA target of US$4.7 billion in 2018, adding that he sees a rise of 10 to 12% in the price of its products in the US.