Solid Cement secures $75-million loan for new Antipolo plant

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CEMEX Holdings Philippines, Inc. (CHP) has secured a subordinated revolving loan worth up to $75 million to finance its new plant in Antipolo, Rizal.

In a disclosure to the stock exchange on Monday, the listed cement manufacturer said its operating subsidiary Solid Cement Corp. availed of a subordinated revolving credit facility from one of the companies under the Cemex group, Cemex Asia, B.V.

CHP said Solid has already made an initial drawdown worth about $40.7 million.

The loan is set to mature in six years, carrying a fixed interest rate ranging from 8.2%-10.2% annually, depending on the company’s consolidated leverage computed from its net debt and consolidated EBITDA (earnings before interest, taxation, depreciation, and amortization).

A subordinated loan indicates that it ranks after other debts to be paid should a company go bankrupt or be liquidated. In this case, CHP said the loan is subordinated to its facility agreement with BDO Unibank, Inc. last February 2017 worth $280 million.

“Solid is entitled to prepay the loan with any other proceeds (aside from a new loan from a related company outside the CHP group) at any given time and with no prepayment penalty whatsoever,” the company said.

CHP will use the proceeds of the loan to finance the construction and installation of Solid’s new cement plant. The facility will have a capacity of 1.5 million metric tons per year, and serves as an expansion of the cement line at Solid’s plant in a 42-hectare property in Antipolo.

The company announced last year that it will be spending $235 million to expand the Solid cement plant’s capacity, increasing its total output to 3.4 million metric tons.

The expansion comes amid the expected surge in demand for cement products under the government’s Build, Build, Build program, which will see the construction of more infrastructure projects in the country.

“With the national government’s Build, Build, Build infrastructure program, CEMEX continues its major role in supporting the construction of the government’s flagship projects which include airports, seaports, railways, roads and bridges across the country,” CHP President and Chief Executive Officer Ignacio A. Mijares said in an earlier statement during the announcement of the project.

CHP swung to a net loss attributable to the parent of P604.7 million in the first nine months of 2018, versus an attributable profit of P687.98 million in the same period a year ago. The company attributed the negative performance to higher input costs due to inflation.

The loss came amid an 8.11% uptick in revenues to P17.91 billion during the nine-month period.

Incorporated in 2015, CHP manufactures and distributes cement products under the Island and Rizal brands in Luzon, and Apo brand in the Visayas and Northern Mindanao areas.

Shares in CHP rose by 2.42% or four centavos to close at P1.69 each at the stock exchange on Monday. — Arra B. Francia