State-controlled Colombian oil company Ecopetrol is set to offer shares in its long-awaited equity follow-on beginning July 27. The details about the pricing and size of the local transaction are to be announced at or before the beginning of the order period, scheduled for July27-August 17. The biggest question is the size of the deal after the government changed its plans several times over the past year or so. The state-controlled oil company is able to sell up to 9.9%, though the expectation is for much less, perhaps as little as 1.0%. A 1% stake would still create a COP1.48trn ($838m) deal, at Wednesday’s COP3,650 close. Local bankers expect 2%-4%. Credit Suisse, JPMorgan and Bancolombia are expected to manage the sale after being mandated as bookrunners on Ecopetrol’s previous transaction.
Yearly Archives: 2011
GPA Deal Collapses as BNDES Withdraws Support
Attempts by Carrefour and Grupo Pao de Acucar (GPA) to reach a merger agreement appeared dead after Brazilian development bank announced it had withdrawn its support for the deal late Tuesday. French retailer Carrefour had hoped to merge its Brazilian assets with GPA to create a EUR30bn revenue company. BTG and Brazilian development bank BNDES would have provided a capital injection of EUR2bn along with EUR500m in debt financing. Gama, the BTG investment vehicle, and Carrefour would have each owned a 50% stake in GPA, while Gama would have received 90 million shares in Carrefour, representing 11.7% of its capital. Casino, Carrefour’s rival in the French retail market, has been increasing its stake in GPA. It now owns 43.1% of the retail group and is the controlling shareholder. Casino rejected the offer at its board meeting Tuesday. Casino can gain full control of the retailer next year through an existing purchase agreement with GPA’s chairman Abilio Diniz.
Investors Put Cash in Unidas
Brazilian rental car provider Unidas has raised BRL300m ($188m) from existing and new shareholders in a private transaction. It sold the 134.8m new shares at BRL2.23 each. The participants included controller SAG of Portugal, as well as private equity funds Kinea Investimentos, Vinci Capital and Gavea Investimentos.
Markets Debate YPF Pricing
Whether YPF would pull the trigger this week remained unclear Wednesday as markets struggled to reach a consensus on pricing for the Argentine oil and gas company’s new 8-year, 7-year average life bond. Talk among investors ranged anywhere from the low 6s up to 7%, at least as a starting point, but leads failed to emerge with any official guidance after wrapping up roadshows yesterday. Today may be a different story, though recent volatility has made life difficult for several borrowers eyeing issuance this week. Markets did received a boost early Wednesday after China emerged with strong economic data and Fed chairman Ben Bernanke expressed a willingness to implement more quantitative easing. But continued unease over Europe’s debt crisis plus Moody’s move yesterday to put the US on review for a downgrade are weighing on sentiment. It is thought that YPF wants to showcase what is a rare bond for one of Argentina’s few blue-chip names and it is unlikely to pay a volatility premium given it has no real funding needs. “It is not a question of price discovery. It is a matter of finding the appropriate markets conditions and building a trade that the company would be happy with,” said one banker. In regards to pricing, investors were largely debating where YPF, owned by Spain’s Repsol, should come against another Argentine oil and gas company, Pan American Energy (PAE), which is now jointly controlled by Bridas and China’s CNOOC. “Where YPF comes depends on whether you think it is a better credit than Pan American,” said one banker. PAE’s bonds were trading at around 6.90%, but they have a longer 2021 maturity and under better market conditions can be quoted as tight as 6.625% (+/- 1/8), according to one trader. One investor who liked YPF and saw some scarcity value in the name thought the company could come at 6.25%-6.375%, while some put a final print at around 6.625%-7.00%. This compares to the sovereign’s New York law 2017s which were trading at around 8%, while YPF
Mexican Bank Ready to Test IPO Market
BanRegio is scheduled to price its IPO today, aiming to raise close to $200m equivalent in Mexico’s second Bolsa debut this year. The Mexican bank, which focuses on lending to small and medium-sized businesses, plans to price 56.7m shares at MXP31.50-MXP40.00 each. This would mean a MXP2.33bn ($201m) transaction if done at the MXP35.75 midpoint and a 15% greenshoe is exercised. The base deal includes a secondary sale of 18.9m shares from controlling shareholders. “It has a strong asset base and operates in a market niche that’s growing very much,” says a Mexican investor looking at the deal. The transaction represents a 19.6% stake in BanRegio, which is raising funds to expand its operations in terms of size and geography. The bank plans to enter 8 more Mexican states, mainly in the center and south of the country. Banamex and BBVA Bancomer are managing the deal, half of which is expected to be sold to retail investors in Mexico and half to Mexican and international institutions. BanRegio had MXP53.5bn in total assets at year-end 2010, up 12.3% from 2009. Corporate loans constitute 80% of its MXP24bn loan portfolio, with a stated focus on small and medium-sized businesses. Founded in Monterrey in 1949 by Manuel Santos Gonzalez as Banco Regional del Norte, the lender is present in 13 Mexican states in the north and center of the country.
Minerva, Launches Converts, Plans Warrant Tender
Brazilian meatpacker Minerva plans to sell its BRL300m ($190m) 2015 convertible debentures at between 97.00 and 103.00 of face value on July 26 and will tender for outstanding stock warrants thereafter. The deal is being called the Brazilian market’s first-ever public sale of mandatorily-convertible debentures, The issuer elected to price the bonds at the premium or discount, as regulators only wanted investors bidding on one value during the sale process, according to a company official. The issuer had originally planned to negotiate the interest rate, now set at 100% of DI, as well as the minimum and maximum conversion prices, now set at BRL6.00 and BRL8.00, respectively. Shares closed at BRL5.24 Wednesday. Proceeds from the sale are marked for repaying existing debt, and for working capital. Minerva is rated BBB minus on a national scale. Goldman Sachs, Deutsche Bank and Banco do Brasil are leads. Separately, following the convertible bond sale Minerva says it plans to launch a tender for some BRL150m notional value in stock warrants issued as part of a 2009 capital raise.
Northgate Diversifies with Mexican Mine
Canadian mining company Northgate Minerals has acquired Primero Mining for approximately $409m. Primero owns the San Dimas gold and silver mine in Mexico. The deal will give Northgate a total of three mines, with two in Australia. “It makes a lot of sense,” says analyst Chris Ecclestone of Hallgarten & Company, citing the increased diversification the San Dimas mine will provide Northgate. Northgate will acquire all of the issued and outstanding common shares of Primero for 1.50 in new Northgate common shares per Primero share, for total consideration of $4.215 per share. The offer represents 13.9% premium to Primero’s July 12 closing price of $3.70. Northgate shareholders will own 69% of the pro-forma entity. The offer includes a $25m breakup fee payable to Primero and a $12m fee payable to Northgate. Primero had originally acquired the San Dimas from Goldcorp in August last year for $216m in cash, $60m in convertible notes paying 3% interest, $50m in promissory notes paying 6% and 31m shares of Primero, leaving Goldcorp a 35.5% shareholder in Primero. Yesterday’s deal will make it an 11% shareholder in Northgate. The deal is expected to close in mid-September. Northgate has retained GMP Securities to act as financial advisor and Torys as legal advisor. Canaccord Genuity is acting as financial advisor for Primero, while McMillan is acting as legal advisor. Macquarie Capital Markets Canada and GMP Securities provided fairness opinions to the board of directors of Northgate. BMO Capital Markets did the same for Primero. Northgate’s shares rose 0 .35% to close at $2.90 on the Amex Wednesday.
OMA Issues MXP Bond
Mexico’s Grupo Aeroportuario del Centro Norte (OMA) has issued MXP1.3bn ($111m) in 5-year floating rate bonds, says a banker on the deal. The bonds priced at TIIE+70bp, pricing tight to the 65bp-70bp area guidance. The airport operator, rated AA plus, will use proceeds to reduce bank debt and for general corporate purposes. It is the issuer’s debut local bond. Banamex, HSBC and JPMorgan managed the deal.
Minerva Preps For Possible Upgrade
Moody’s placed Minerva’s B3 corporate family rating on review for a possible upgrade, following the announcement of a planned offering of BRL300m ($190m) in mandatorily convertible debentures. The rating could be upgraded if Moody’s expects the Brazilian beef producer to continue to diversify its revenue and cash flow streams, and reduce adjusted total debt to Ebitda to below 5.0x. Moody’s last rating action for Minerva occurred January 13 when it changed the corporate family rating outlook to positive from stable. This reflected the rating agency’s view that Minerva would continue to deleverage, manage Capex and expand processed food revenues.
Repsol Sells YPF Block
Repsol has raised ARP351.3m ($86m) through a block sale of YPF shares in Argentina’s domestic market. The Spanish parent sold 1.99m shares in the Argentine oil and gas company at ARP177 each, representing a 7.8% discount to the previous ARP192 closing price. Shares closed at ARP183.00 Tuesday. BBVA Banco Frances and Raymond James Argentina managed the sale. The deal tacks on another 0.5% of YPF to the portion Repsol has been selling as part of a long-term plan to reduce its stake while keeping a majority. In May, Grupo Petersen agreed to exercise an option to buy 10% of YPF from Repsol for $1.3bn. That deal was the most recent in a string of transactions, including the $1.23bn secondary sale of YPF ADS in March that reduced Repsol’s position in YPF to about 58%.