The cement company Molins leaves the corros market after 80 years and will trade on the continuous market from Monday. The company, valued at 2.578 billion on the stock market, plans a capital increase to raise its free float and aims to enter the Ibex 35.
The Catalan cement company Molins ends more than eight decades in the corros market and will make the leap to the continuous market next Monday. The company, chaired by Julio Rodríguez, seeks with this move to increase its visibility and the liquidity of its shares, which last year barely recorded 4.9 million euros in trading.
The market change will leave the corros system practically orphaned, with only five companies remaining: Ayco Grupo Inmobiliario, Liwe España, Minerales y Productos Derivados, TR Hotel Jardín del Mar, and Urbar Ingenieros. The combined capitalisation of these firms, two of which are suspended from trading, will not exceed 42 million euros.
Capital increase on the horizon
With almost 95% of the capital in the hands of the three family branches (Molins Amat, Molins Gil, and Molins López-Rodó) and treasury shares, the company is already working on a capital increase in the coming months. The goal is to increase the free float, the portion of shares that trade freely, and at the same time reduce the debt incurred to finance the purchase of the Portuguese Secil.
The operation, completed in March for 1.4 billion euros, was financed with a bond issue of 500 million and a bank loan of 1.18 billion, later reduced to 680 million. Before the acquisition, Molins had a positive net cash position of 94 million euros.
The capital increase, in addition to raising the trading volume, would serve to reduce the debt of a company that until the acquisition had a positive cash balance of 94 million euros.
Path to the Ibex 35?
The market capitalisation of Molins amounts to 2.578 billion euros, a figure that places it at levels similar to those of Solaria or Laboratorios Rovi. If the capital increase manages to raise liquidity and the free float, the company could aim to enter the Ibex 35 in the future, something that until now was unfeasible due to its reduced trading volume.
In the last twelve months, Molins' share price has appreciated by 30% in the corros market, despite tensions between the family branches of the shareholders. With the leap to the continuous market, the shares will trade under the ticker 'CMO' and the company hopes to attract institutional investors.
The purchase of Secil, which contributes around 750 million euros in revenue, will raise Molins' income above 2 billion and place it among the 40 largest cement companies in the world. The operation opens the doors to Brazil and strengthens its presence in Portugal and Latin America.
For the individual investor, the change represents an opportunity to access a stock that until now was almost illiquid. The planned capital increase will allow for easier buying and selling of shares, although the timing and conditions have yet to be specified. The company will not hold the traditional bell ringing to mark its debut, remaining true to its low profile.
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