October 13, 2017 / 5:39 PM / a year ago

Loma Negra seeks $800 million in U.S., Argentina IPO

SAO PAULO (Reuters) - Loma Negra Cia Industrial Argentina SA plans to raise around $800 million in an initial public offering in Argentina and the United States, as the owner of Argentina’s No. 1 cement maker takes advantage of growing investor interest in the nation’s companies to cut debt.

According to a Thursday securities filing with the U.S. Securities and Exchange Commission, Loma Negra will sell 50 million American Depositary shares representing five common domestic shares each at a suggested price range of $15 to $19.

At the mid-point of the suggested price range, almost 90 percent of proceeds - or about $700 million - will go to Intercement Brasil SA, Brazil’s second-largest cement producer, which owns 99 percent of Loma Negra. The remaining amount will go to the coffers of Loma Negra, the filing said.

The filing did not disclose a timetable for the transaction. Reuters reported on Sept. 6 that Loma Negra had hired banks to underwrite the IPO.

The transaction is key for Camargo Correa SA, the industrial group that owns Intercement, to cash out from a decade-long investment in Loma Negra to cut debt. Sources told Reuters in September that an IPO would lure investors willing to double down bets on an Argentine economic recovery.

Latin America’s third-largest economy is slowly luring back foreign investment thanks to President Mauricio Macri’s market-friendly policies. It also shows how Camargo Correa is battling the effects of Brazil’s worst recession ever and a corruption probe that ensnared the group’s engineering unit.

After the sale of a 32 percent stake in Loma Negra and the issuance of new stock, Intercement may hold up to 57 percent in the cement maker. Intercement could be further diluted to 51 percent if investors exercise their right to buy additional and supplementary allotments in the IPO, the filing said.

Proceeds from the so-called primary portion of the IPO will help Loma Negra fund an expansion of the L’Amali plant in the Buenos Aires region.

Reporting by Tatiana Bautzer; Editing by Guillermo Parra-Bernal and Diane Craft

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