LatinFinance - July 2013 - 35

Conbon33

the Colombian stock exchange was three
times subscribed and raised 2.09 trillion
pesos ($1.15 billion). It took an unusual
structure for the Colombian equity
market, pricing within a pre-set range and
split into local and 144A tranches.
An exchange of three convertible
bonds is also on the horizon: the company
received shareholder approval on such
a transaction in March. A tender could
happen as soon as this year, González
says.
Cemex expects its operations in
the Americas to perform better than
its European ones, where growth will
remain lackluster over the next four
years. The company plans to offset
weakness there through increased
business diversification, González says.
The company reported a net loss of $281
million in the first quarter, compared to
$30 million a year before. Sales in the
quarter fell 5% from a year earlier to $3.3
billion, attributed mainly to a slump in
Europe.
Following four years of market
declines after the global financial crisis,

New mix: Cemex changes gears
Cemex has started to see a turnaround in
its core US business, boosting cashflow
and Ebitda in 2012. González says 2013 is
on track to be “a second recovery year”.
Part of its new strategy includes
finding new efficiencies and economies

of scale. Cemex has undertaken a
10-year strategic agreement with IBM
for business process and information
technology services. Cemex is expected to
generate savings close to $1 billion over
the life of the contract, González says. LF

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Andean corporate with the best capital markets strategy

Cencosud

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Birth of a champion
When it comes to financing a large-scale acquisition, Cencosud shows the debt
and equity markets how it’s done

or Cencosud, it was a “perfect fit”, says
CEO Daniel Rodríguez. In October,
the Chilean retailer cemented its hold
in the Colombian market with the €2
billion ($2.6 billion) purchase of French
multinational Carrefour’s assets in the
country.
For Cencosud, the appeal was a
strong brand and the fact that the target
stores came with around 80% of the
accompanying land. The deal also meant
the prospect of owning 18% of the
Colombian supermarket sector.

On its own, the transaction was
an impressive example of a Latin
champion extending and consolidating
its reach. Coupled with a sophisticated
capital markets strategy to finance the
acquisition, the company glides to a win
as the Andean corporate with the best
capital markets strategy.
With supermarket, mall and
department store operations in Chile,
Brazil, Peru, Argentina and Colombia,
where it has had a smaller presence since
2007, Cencosud turned to JPMorgan

for a $2.5 billion bridge loan to fund the
purchase.
It then set about refinancing the loan.
First, it sold a $1.25 billion 10-year bond
in November. Then in March, it closed
an equity follow-on that raised 770.65
billion pesos ($1.64 billion). The retailer
sold 299.69 million shares at 2,600 pesos
each, representing close to 99% of the
stock up for sale. The family of Cencosud
chairman Horst Paulmann exercised its
rights, maintaining a more than 60%
stake in the company.
South America’s second-most
populous country, Colombia is an
important market for Cencosud,
Rodríguez tells LatinFinance. Before the
Carrefour acquisition, Cencosud lacked a
supermarket operation there – a business
line that is its most important in other
countries.

July 2013

LatinFinance 35

LatinFinance - July 2013

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