Details

Abstract / Summary

CEMEX of Mexico closed its acquisition of The Rinker Groups of Australia in April 2007 after raising its offer to US$15.85 per share. This represented a 54% premium over Rinker's closing price prior to the initiation of the hostile offer. CEMEX, in line with its customary acquisition process, financed the entire purchase with debt. But within a year CEMEX was struggling to service its sizeable outstanding debt as business conditions and financial results declined with the financial crisis of 2008. The company was facing debt service of $5.5 billion in 2009, money which it did not have. CEMEX would need to propose a strong and convincing financial restructuring plan to its creditors if it wished to survive. This case has been used in a variety of graduate degree programs to illustrate financial restructuring of a non-financial corporation. Focusing on traditional financial metrics of corporate performance and indebtedness, the case requires the student to propose a financing plan for 2009 that will, hopefully, appease and convince its creditors of its financial solvency moving forward. The primary device used for analysis is the corporate statement of cash flows.

Field of Interest

Business & Economics

Author

Michael H. Moffett, fl. 2011

Copyright Message

Copyright © 2017 Thunderbird School of Global Management, a unit of the Arizona State University Knowledge Enterprise.

Content Type

Case study

Duration

0 sec

Format

Text

Original Publication Date

2017

Page Count

12

Publication Year

2017

Publisher

Thunderbird Global School of Management

Place Published / Released

Glendale, AZ

Subject

Business & Economics, Social Sciences, Finance, Credit, Financial investments, Debt, Cement and Concrete Product Manufacturing, Finanzas, Finanças, Rinker Group, Cemex, Mexico

Keywords and Translated Subjects

Finanzas, Finanças