UPDATE 4-Cemex sees $1 billion share offer by June

* Cemex likely to issue $1 bln in stock by June 2010

* Company faces penalties if stock not sold

* Cemex sees recovery in its key U.S. market (Adds quote, updates share price)

By Noel Randewich and Tomas Sarmiento

MEXICO CITY, Aug 17 (Reuters) - Cemex, the world's No. 3 cement maker, said on Monday it must raise $1 billion in equity by June as part of a $15 billion debt restructuring that has allayed fears of default.

Monterrey-based Cemex (CMXCPO.MX) (CX.N) will face higher interest rates on its debt owed to banks and an additional $100 million fee if it does not sell the shares by then, executives said during a conference call with analysts.

Hector Medina, Cemex's vice president of finance, told Reuters he would not rush to complete the share sale.

"We'll be monitoring the market. Negotiations with our financial institutions specifically gave the company room to be flexible," Medina said.

Fears that it would fail to satisfy creditors have hurt Cemex since last year, when the global credit crisis slammed construction markets and made it harder for even the largest emerging-market companies to borrow in dollars.

Cemex had been under immense pressure to reach a deal to extend debt it took on to finance its acquisition of Australia's Rinker in 2007. The company had faced unmanageable debt maturities over the next two years.

The restructuring agreement extends Cemex's debt through 2014 and executives have vowed to use free cash flow from operations, proceeds from asset sales and equity issuance to pay it down as quickly as possible.

Cemex shares gained 2.53 percent to 14.21 pesos on Monday after surging more than 17 percent since July 29 on expectations the company would reach a deal.

Cemex said it would create up to 1.6 billion new CPO shares -- worth about $1.7 billion at current prices -- within two years to be used in a stock offer or through convertible bonds.

The company's market capitalization is about $9 billion, according to Reuters data.

SIGNS OF RECOVERY

Cemex said it saw signs of recovery in its key U.S. market, where it is a major player.

"We expect the moderate recovery that seems to be starting in some parts of the country to gradually gain strength," Medina said, adding Cemex's forecast for the U.S. market was more conservative than consensus.

Some of the banks involved in the restructuring are New York-based Citigroup (C.N); Spain's BBVA (BBVA.MC) and Santander SBP.N; Europe's top bank, HSBC (HSBA.L); and Britain's Royal Bank of Scotland (RBS.L).

Rinker's U.S. assets have made Cemex the top cement maker in the United States, but the deal closed as the U.S. housing collapse struck.

Cemex, which acknowledges that the Rinker purchase was ill-timed, operates in 50 countries and competes globally with Switzerland's Holcim (HOLN.VX) and France's Lafarge (LAFP.PA). (Editing by Carol Bishopric)