Holcim Ltd. (HOLN), the world’s largest cement maker, raised 375 million Swiss francs ($410 million) through asset sales in Thailand and Guatemala as Chief Executive Officer Bernard Fontana kicked off the first divestments in his cost-saving program.
Holcim cut its stake in Thailand’s Siam City Cement Pcl (SCCC) to 27.5 percent from 36.8 percent in a sale to Bangkok Broadcasting and Television Co., the Jona-based company said in a statement today. The company also sold a 20 percent stake in Guatemala’s Cementos Progreso SA to majority shareholder Grupo Cemcal SA Progreso.
“These are strategic divestments,” Phil Roseberg, an analyst with Sanford C. Bernstein in London, said in an e-mail. “Thailand is a problem market where growth has really not picked up since the Asian crisis in 1997. So reducing its stake, while keeping a foothold makes sense.”
The divestments are Holcim’s largest in more than four years since selling 85 percent of its Venezuelan assets to that country’s government for $552 million in 2008. The proceeds will contribute to Fontana’s 1.5 billion-franc cost-saving program, Holcim said in today’s statement. Earlier this week, Holcim said it would double spending on restructuring costs in the fourth quarter to counter overcapacity from a construction slump in European markets.
Holcim is the only cement-firm to have kept hold of its investment grade rating while European peers HeidelbergCement AG (HEI) and Lafarge SA (LG) are junk-status after entering the financial crisis saddled with debt from their acquisitions of Hanson and Orascom Cement, respectively.
Fontana has indicated since joining Holcim in February that he would consider “selective divestments” while Chief Financial Officer Thomas Aebischer said asset sales would be smaller than those planned by competitors.
Siam City Cement had sales of $755 million in 2011, and employs 3,250 people, Holcim said.
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