Mexico: Elementia plans to raise about US$290m in IPO

Mexican building materials company Elementia plans to raise about MXN4.5bn (US$290m) in its initial public offering next month.

A preliminary prospectus detailed that Elementia plans to offer 201 million shares at a range of between 20 and 25 pesos per share.

The IPO will take place on 9 July and shares can begin trading on 10 July, the company said. It will also include a 15 per cent over-allotment above the base amount, which will bring the total number of shares to about 231 million, representing 26.46 percent of the company's shares.  The capital raised will be mostly used to increase production capacity in the company's cement division.

Last year, Elementia acquired Lafarge's 47 per cent stake in Cementos Forteleza, a joint venture cement venture between the two groups in Mexico. Elementia now has full control of the three cement plants which are situated in the central state of Hidalgo and operate under the Cementos Forteleza brand. The Tula works, located in the municipality of Atotonilco de Tula, is currently being expanded by 1.5Mta. Due for completion in 2017, the project will increase Forteleza's capacity to 3.5Mta.

In the 1Q15, the company's Cement division reported a 26 per cent YoY rise in revenue to $405m, mainly due to higher sales volumes (+17 per cent YoY) and the beginning of a recovery in pricing. EBITDA for 1Q15 more than doubled to $202m (versus $95m a year earlier), benefitting from cost optimisation and lower electricity costs.