Announcement following the results of The Annual Meeting of Stockholders
CEMEX HOLDINGS PHILIPPINES, INC. ("CHP") (PSE: CHP) reiterated today that, as previously disclosed, the Board of Directors of CHP resolved on April 2, 2019 to amend the Articles of Incorporation of CHP to increase the corporation's authorized capital stock, since any equity capital raise would require additional shares that can only be obtained by increasing the authorized capital stock. As per the Philippine Revised Corporation Code, an increase in authorized capital stock will need the approval of shareholders holding at least 2/3 of the company’s total outstanding capital stock and the Securities and Exchange Commission. The Annual Meeting of Stockholders of CHP was held on June 6, 2019 where affirmative votes representing approximately 64.69% of total outstanding capital stock were received, short of the required affirmative vote threshold.
Despite the outcome, CHP is continuing with the Solid Cement plant expansion and is on track to bring the project on line by the fourth quarter of 2020. CHP is not in breach of any loan covenant and continues to enjoy support from its lending bank. CHP maintains a positive outlook on the industry and the expansion is expected to allow CHP to maintain its position in a market that CHP continues to believe has a long-term favorable demand outlook.
CHP’s management continues to believe that a capital increase is currently the best option for CHP to improve its capital structure, fully fund the ongoing Solid Cement plant expansion and provide balance sheet flexibility.
CHP continues to undertake activities with the objective of completing this capital increase in 2019. Subsequent to the Annual Meeting of Stockholders, CHP’s Investor Relations team was contacted by shareholders who expressed their support for the increase in authorized capital stock but were not able to vote during the meeting.
CHP’s Board of Directors is expected to disclose certain details of the transaction during the third quarter of 2019. CHP would also highlight that any potential equity capital raise would be fair, transparent and equitable to all its shareholders. All relevant approvals will be sought and appropriate disclosures would be made to the Securities and Exchange Commission, Philippine Stock Exchange and the public in accordance with regulatory requirements.
CEMEX, S.A.B. de C.V. (“CEMEX”), the ultimate controlling shareholder of CHP, has been very supportive of both CHP and the Solid Cement plant expansion plan, and believes in the Philippines’ growth story for the long term. As CEMEX has shown in the past, CHP expects CEMEX to be supportive of any other actions CHP decides to implement, including any potential equity capital raise CHP may consider to undertake.
CHP, a listed company at the Philippine Stock Exchange, is one of the leading cement producers in the Philippines, based on annual installed capacity. CHP produces and markets cement and cement products, such as ready-mix concrete and clinker, in the Philippines through direct sales using its extensive marine and land distribution network. Moreover, CHP’s cement manufacturing subsidiaries have been operating in the Philippines with well-established brands, such as "APO," "Island," and "Rizal," all having a multi-decade history in the country.
CHP is an indirect subsidiary of CEMEX, S.A.B. de C.V., one of the largest cement companies in the world based on annual installed cement production capacity. The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange and the New York Stock Exchange.
For more information on CHP, please visit website: www.cemexholdingsphilippines.com.
This announcement contains forward-looking statements and information that are necessarily subject to risks, uncertainties, and assumptions. CHP assumes no obligation to update or correct the information contained in this announcement.