BUENOS AIRES (Reuters) - Shares in Loma Negra Compania Industrial Argentina SA (LOMA.BA), Argentina’s largest cement producer, debuted on the New York Stock Exchange at $21.65, 14 percent above the initial public offering price of $19 per American depositary share (ADS).
Loma Negra on Tuesday raised $954 million in a public offering of depositary shares in New York and ordinary shares on Bolsas y Mercados Argentinas (BYMA) at a price of $3.9 per share. Each ADS represents five ordinary shares.
“The sale went much better than we were expecting,” Loma Negra Chief Executive Officer Sergio Faifman told Reuters.
He said $100 million of the money raised would go toward financing its planned $350 million expansion of the L’Amali cement plant, which will allow it to increase annual production to 4.9 million tonnes by the beginning of 2020, up from 2.2 million tonnes currently.
The company has benefited from the major infrastructure buildup market-friendly President Mauricio Macri has undertaken since taking office in late 2015.
Following a recession in 2016, Argentina’s economy has gathered momentum in the second half of this year. The economy grew 4.3 percent in August versus the same period of last year, bringing cumulative growth so far in 2017 to 2.4 percent, while economists expect 3 percent growth in 2018.
Faifman said the money raised from the IPO would also go “to strengthen our financial structure to proceed with other investments if Argentina grows even more than we are expecting.”
Loma Negra, whose parent company is Intercement Brasil SA, has 18 plants in Argentina. Camargo Correo SA, the industrial group that owns Intercement, purchased Loma Negra in 2005 for $1 billion but has long considered a partial sale as Latin America’s No. 3 economy slowly lures back foreign investment under Macri.
It was one of several companies in Argentina and neighboring Brazil expected to go public within the next year as governments have sought to ease regulations and growth has picked up.
BofA Merrill Lynch, Bradesco BBI, Citigroup, HSBC, Itau BBA and Morgan Stanley were the top underwriters for the deal.
Writing by Luc Cohen; Editing by Andrew Hay