InterCement deal ‘once in a lifetime opportunity,’ Mindlin says

A deal spearheaded by Argentine energy mogul Marcelo Mindlin to restructure one of Brazil’s top cement producers was a unique chance to gain exposure to two of Latin America’s biggest economies, he said in a Bloomberg TV interview. 

Mindlin, better known as chairman of Argentina’s Pampa Energía SA, is leading a group of investors and creditors seeking to restructure Brazil’s InterCement, the parent company of Loma Negra SA, which has a roughly 45 percent share of Argentina’s cement market. 

InterCement is under bankruptcy protection in Brazil and part of its US$1.8 billion in debt was converted into equity, with Mindlin’s group gaining control after acquiring distressed loans. Now, the firm has about US$450 million of debt, including US$110 million injected by the new shareholders.

“It shows our confidence in the region,” Mindlin said, adding that the deal was a “once in a lifetime opportunity to buy such significant market shares in cement in two countries at the same time.”

Mindlin added that as part of the restructuring InterCement doesn’t have any debt maturities until 2031. “Now our management team can dedicate to do the investments that weren’t done because of the financial situation,” he said in a separate interview Monday.

Mindlin said there may be synergies to explore between the new cement business and his other construction and engineering companies, but noted that they can also make money as standalone operations.

More broadly, Mindlin said that the war in Iran provides Argentina with an opportunity to pitch its booming shale oil and gas production to the world.

Pampa is partnering on projects to export Argentine crude and liquefied gas from shale patch Vaca Muerta. Mindlin also underscored Pampa’s interest in building a urea plant on Argentina’s Atlantic coast that will use the shale gas as an input. Urea is another commodity that has been impacted by the near-closure of the Strait of Hormuz.

“The war is going to be over – it could take one week or some weeks, but it’s going to be over.” Mindlin said. “Our challenge in Argentina is to present ourselves to the world as reliable alternative source of energy.”

On Argentina, Mindlin expressed confidence that the nation’s real estate market would pick up soon as inflation rates come down, helping spur more cement sales in the construction space. He also see good prospects as more road concessions boost investments in maintenance.

“We are seeing inflation going down, not as fast as we all would like, but we are optimistic that that’s going to continue and real estate is going to recover,” he said in the separate interview.