06 June 2016
Kerneos to be sold by Astorg 06 June 2016
France: Private equity firm Astorg is to sell company Kerneos, according to sources reported on by Reuters. Investment bank Lazard has been appointed to work on the sale. The sale of the calcium aluminate cements producer could generate around Euro1bn. None of the parties commented on the story.
Kerneos started as a joint venture between subsidiaries of Lone Star Industries and Lafarge Coppée in 1970. It was purchased by Astorg from building materials business Materis in 2014 for around Euro600m.
Philippines: The Securities and Exchange Commission (SEC) has approved the US$857m initial public offering of Cemex Holdings Philippines. Documents filed with the SEC showed that Cemex Holdings planned to sell 2.032 billion common shares at an offer price of up to US$0.37/share to raise US$746m in proceeds. Another 304.94 million shares were allotted in case of oversubscription, which could increase total proceeds to US$857m, making it among the largest IPOs in the country, according to the Manila Standard newspaper.
Documents show that Cemex Holdings aimed to use the proceeds to repay up to US$504m worth of short-term loans from related third party New Sunward Holdings, which was used to acquire operating subsidiaries Apo Cement Corp and Solid Cement Corp. Cemex Holdings said it planned to spend US$52m for 2016 capital expenditures, including US$13m for maintenance of existing cement facilities.
Cemex Holdings is a newly formed subsidiary of Cemex Asian South East Corp., which is wholly-owned by Cemex España, which in turn is indirectly owned by Cemex. Cemex Holdings operates two cement plants in the Philippines with a cement production capacity of 5.7Mt/yr.
Jaypee Group defaults on US$666m payments 06 June 2016
India: Jaypee Group companies have defaulted on loans and other payments worth US$666m. The group has, on a consolidated basis failed to repay US$434m in principal amount to banks and another US$233m in interest payments.
Jaiprakash Associates, the group's main company, reported a loss of US$500m in its 2015 – 2016 financial year, compared to US$259m in the same period in the previous year. Earlier in 2016, Jaiprakash Associates agreed a deal to sell cement plants in five states to UltraTech Cement for US$2.4bn. Once the deal concludes Jaiprakash Associates will be left with a cement production capacity of 10.6Mt/yr in Madhya Pradesh, Uttar Pradesh, Andhra Pradesh and Karnataka.
Australia: The Australian Competition and Consumer Commission (ACCC) has filed an appeal against a US$12.6m fine against Cement Australia, which it views is too low. On 16 May 2016 a Federal Court published orders imposing a penalty of US$13.7m on the cement producer. One order was then set aside, reducing the fine to US$12.6m. However, the ACCC contends that a penalty of over US$66m is more appropriate for the breaches of Australia’s competition legislation.
“The ACCC will argue to the Full Court that the penalties imposed on Cement Australia are manifestly inadequate, and not of appropriate deterrent value,” said ACCC Chairman Rod Sims. He added that suitable financial penalties were considered ‘essential’ as a deterrent to anti-competitive conduct and to prevent businesses viewing such behaviour as an acceptable cost of doing business.
The proceedings relate to contracts that were entered into by Cement Australia companies between 2002 and 2006 with four power stations in South East Queensland, to acquire fly ash. The court found numerous contraventions of the Competition and Consumer Act 2010. It also fined Christopher White, a manager in the Cement Australia fly ash business during the relevant period, a penalty of US$14,700 for his involvement in making the contravening contracts with the operator of the Swanbank power station in 2005.