Secil call option dispute

By Chris Sleight30 October 2009

An argument has erupted between Ireland-based materials producer CRH and Portuguese industrial conglomerate Semapa over the ownership of Portuguese cement manufacturer Secil. Semapa has started a valuation process that may lead it to exercise a call option to acquire CRH's shareholding in Secil. CRH says the conditions allowing Semapa to exercise its call option have not arisen.

Semapa has controlled Secil since the Portuguese government privatised the cement company in 1995. In 2004 CRH spent € 429 million to acquire 45,126% of Secil's share capital and 49% of the company's voting rights. Semapa still controls 49,67% of the company's share capital and 51% of its voting rights and manages it as a joint venture with CRH.

A statement issued by Semapa said certain unspecified conditions had arisen that meant, according to its shareholder agreement with CRH, it could initiate a valuation exercise on Secil. Once this is complete, the company said it might exercise a call option to acquire CRH's shareholding in the company.

CRH has countered that it does not believe the conditions allowing a valuation and exercise of Semapa's call option have arisen. It said it would be referring the issue to the International Chamber of Commerce (ICC) in Paris for arbitration.

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