Ready Mix USA LLC, a joint venture in which CEMEX, S.A.B. de C.V. (CX) has a 49.9% stake, completed the sale of 12 active quarries and certain other assets to SPO Partners & Co. for $420 million. The active quarries – which consist of 2 granite quarries in Georgia, 9 limestone quarries in Tennessee, and 1 limestone quarry in Virginia – are operated by Ready Mix USA LLC and were deemed non strategic by CEMEX and Ready Mix USA LLC.

The proceeds from the sale will be partly used to reduce debt held by Ready Mix USA LLC, and to effect a cash distribution of approximately $100 million to each joint venture partner. CEMEX, which does not consolidate the results of Ready Mix USA LLC, expects to use its cash proceeds from this divestment to reduce outstanding debt and enhance liquidity.

This divestment marks another milestone in CEMEX’s efforts to regain financial flexibility. Other such milestones include the completion of the refinancing of $15 billion of its outstanding debt and the issuance of close to $2.3 billion in notes, including $500 million last month. Additionally, CEMEX has raised $2.2 billion in equity and mandatory convertible securities and sold its Australian operations to Holcim for $1.7 billion.

Net debt at the end of the fourth quarter was $15,053 million, representing a decrease of $2,032 million from the previous quarter.

Although, Cemex is making genuine efforts to reduce operating costs and net debt, the continued weak cement volumes in Spain and U.S. remain a problem. Moreover, the overall economic situation is still uncertain.

Zacks Investment Research

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