Cemex leadership unclear after sudden death of CEO

Tue May 13, 2014 7:00pm EDT
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By Christine Murray and Elinor Comlay

MEXICO CITY (Reuters) - The leadership of Mexico's Cemex (CMXCPO.MX: Quote) (CX.N: Quote), one of the world's leading cement makers, is uncertain after the death of Chairman and Chief Executive Officer Lorenzo Zambrano, irking some investors who would prefer a smooth transition.

There had been no reports that Zambrano, who had been Cemex CEO for three decades, was ill and he said late last month he was not thinking about a succession plan. The company said Zambrano died of natural causes in Madrid on Monday at the age of 70 and Mexican media reported he was believed to have had a heart attack.

"I would have liked a more orderly transition," a top-20 shareholder in Cemex, who asked not to be identified, said on Tuesday. "The company faced rocky times to finance its debt, and I imagine that crisis affected the transition plan."

The shareholder would like to see Francisco Garza, chairman of Cemex's advisory board, take over. Chief Financial Officer Fernando Gonzalez is another potential candidate. He led efforts to restructure Cemex's debt and frequently talks to investors.

Cemex's 14-member executive team includes 10 people with more than 20 years of experience with the company.

The board's corporate practices committee discussed a succession process in February, according to a document on the company's website. That process has not been made public.

Cemex spokesman Jorge Perez declined to comment when asked about the document and the company's succession plans. The firm said its board was expected to meet in the coming days but has given no more details.

"I don't think there's any doubt that senior management and the board are going to do something to allay any kind of concerns about the stewardship," said Robert Abad, portfolio manager in the emerging markets team at Western Asset Management in Pasadena, California, which has $53 billion in emerging market assets under management and owns Cemex debt.   Continued...

Employees hold a photograph of Lorenzo Zambrano at a building of Mexican cement giant Cemex in Monterrey May 13, 2014. REUTERS/Daniel Becerril