Caribbean Cement Co. Ltd. and its mining subsidiary, Jamaica Gypsum and Quarries Ltd., acquired a five-year loan from National Commercial Bank Jamaica that will be used mainly to repay older debt, reported the Jamaica Gleaner.
The $3.096 billion loan proceeds will be distributed in the U.S. dollar equivalent, to pay down debt denominated in U.S. dollars, but repaid in Jamaican dollars at a rate of 7.45 percent per annum. Caribbean Cement also said some of the funds would be used for general corporate purposes.
The bank loan follows other recent borrowings by Caribbean Cement. The company signed two loan agreements valued at $102 million with Cemex Espana for the repurchase of assets on its grounds at Rockfort in Kingston, Jamaica, from immediate parent company Trinidad Cement Ltd. Cemex is majority owner of both Trinidad Cement and Caribbean Cement.
Caribbean Cement reported a $1.3 billion payment toward the acquisition of the assets in the first quarter of 2018. The deal terminated an operating lease agreement originally dated July 2, 2010, and returned $118 million of assets (Kiln 5 and Mill 5) to Caribbean Cement, based on its disclosures in March. It also included redemption of about 52 million preference shares issued by Caribbean Cement to Trinidad valued at $40.5 million. The preference shares will be repaid over nine years.
The buyback served to triple Caribbean Cement’s assets in the past year from $7.7 billion to $23 billion, but it left the company servicing new debt of $11 billion.