Advent International has acquired a 50% stake in Terminal de Conteineres de Paranagua (TCP) for around $500m, according to a Brazil-based source familiar with the situation. Analysts say the deal, which implies a valuation of around $1bn for the debt free target, suggests a multiple of around BRL2,400 per 20-foot equivalent unit (TEU). This is in line with TCP’s closest publicly traded comparable, Santos Brasil, which trades at around BRL2,300/TEU, analysts say. The privately held company reported revenue of BRL288m and net income of BRL116m for 2009. Advent trumped competing bids from Santos and Brookfield Asset Management. The acquisition will be funded from the private equity firm’s Lapef IV and Lapef V funds. Advent closed on the $1.65bn Lapef V fund in March of last year after receiving $2.65bn in demand from 51 investors, the largest fund raising on record for the region. Advent raised the $1.3bn Lapef IV fund in 2007. The deal announcement comes after a year-long auction run by Santander. Bradesco advised Advent. Brazilian press report that the acquisition price for the port operator would consist of a $418m initial payment with an additional $80m to be paid out over 2 years. A person close to the transaction says that this breakdown is inaccurate, although a portion of the purchase price would be paid at a later date and is contingent on performance benchmarks.
Yearly Archives: 2011
Canada’s Atlas Dumps Bolivia Silver
Canadian mining company Atlas Precious Metals is pulling out of Bolivia’s Karachipampa silver smelter project. Atlas has a 65% stake in the project, which the Bolivian government is now appropriating. The Bolivian government claims Atlas was running behind schedule and had only invested a small portion of the $120m it had promised. Roy Shipes, chairman, president and CEO of Atlas tells LatinFinance that his company was on schedule to invest the full amount. However, Shipes says the Bolivian government had not fulfilled its promise to surrender ownership of the land associated with Karachipampa. The environmental impact agency then refused to provide an impact study, citing Atlas’ lack of title to the land, Shipes says. Without the impact study, the government would not allow Atlas to develop the project. “We had already invested about $18m,” Shipes says, adding that Atlas will sue Bolivia. While Shipes says Atlas has no intention of investing in Bolivia again, the company is looking for opportunities in other LatAm jurisdictions, including copper, silver and gold projects in Panama.
Sovereigns Shun DCM Party
January is shaping up to be an active month for LatAm debt issuance, at least for corporates. The region has seen $6.17bn in cross-border sales since January 1, up from $5.83bn in the first 2 weeks of 2010. Improved liquidity and access to local funds have meant that the region’s sovereigns have thus far sat out what has traditionally been an active DCM month. “These countries are able to fund themselves in local currency and their balance of payments are in a position where they don’t need to fund themselves to a massive extent in dollars,” Brett Rosen, sovereign analyst at Standard Chartered, tells LatinFinance. He adds that this is thanks in part to improved trade balances and high commodity prices, along with generally better fiscal performance across the board. However, Rosen says he expects some liability management in the medium term. “Sovereigns don’t need money,” echoes a DCM banker. Meanwhile, corporates, banks, and even quasi-sovereigns do not have the same flexibility as sovereign issuers and are taking advantage of present issuing conditions. The banker notes that LatAm issuers were monitoring recent debt auctions conducted by Spain, Portugal and Italy. They were generally seen as successful, with many analysts fearing heightened volatility if the sales went badly. Analysts also say change of government in Brazil and a new public credit director in Mexico may have kept these two issuers sidelined. Argentina, which has been considering a new issue since last year’s agreement with holdouts, is expected to come at some point, though sensitive to price. Among smaller nations, El Salvador has mandated Deutsche for a new deal, and the Dominican Republic last year approved an issue. Costa Rica is another that analysts expect will tap.
Minerva Seen Cutting Leverage
Moody’s changed its outlook for beef producer Minerva to positive, and affirmed its B3 rating. The rating agency says the change in outlook is based on its belief that the Brazilian company will deleverage its balance sheet in 2011. Minerva reduced its leverage as measured by adjusted debt to Ebitda to 5.0x as of LTM September 2010 from 5.9x in LTM June 2010. Moody’s says the rating could be upgraded if the company continues its trend towards greater diversification of revenue and cashflow streams.
Edesur Outlines Capex Plans
Argentina power company Edesur says it plans to invest ARP550m in 2011, 30% more than previously planned. The increase comes after the government demanded the company present a plan to improve its infrastructure following blackouts in the country. A company spokesman says the funds will come from cash on hand. They will be used to launch operations at the Don Bosco, Quilmes and Rigolleau substations, to expand the Perez Galdos, Barracas, Rafael Calzada and Almirante Brown substations and to renovate or install 1,500km of power lines and 1,000 transformers.
Chile Keeps Rates on Hold
Chile’s central bank kept its rate unchanged at 3.25%, surprising the market, which widely expected a 25bp hike. The bank says that demand and employment continue evolving positively, in line with projections. Celfin, one of the banks that had predicted a pause, says inflation pressures are not yet present in the economy and that a pause supports the effectiveness of the recent currency intervention by the central bank. JPMorgan expects Chile to hike at the next meeting and retains its expectation of continued monetary tightening toward neutrality through year-end amid strong economic activity and accelerating inflation. Credit Suisse, which was expecting a hike, sees the rate hitting 5.00% by year-end.
Banco de Chile Loan Heard Oversubscribed
Banco de Chile is heard getting up to $300m in potential commitments for a $150m 3-year bullet loan, according to bankers away from the deal. The loan priced at Libor plus 110bp, say bankers with knowledge of the transaction. Up-front fees are heard at 75bp for commitments of $20m, 70bp for $15m-$19m tickets, 60bp for $10m-$14m, and 50bp for $5m-$9m. A banker away from the deal says the combination of the up-front fee and the 110bp spread over Libor yields an attractive deal for participants. The deadline for commitments for the $150m 3-year loan is today, with final allocations expected the following week. The loan was marketed to Asian lenders, after bank meetings took place in Taiwan in December. Standard Chartered and Wells Fargo are joint leads.
Adecoagro Preps US IPO
Agricultural company Adecoagro aims to raise about $400m in a US IPO, according to regulatory filings. The Luxembourg-based farmland venture that operates in Brazil, Argentina and Uruguay plans to offer 21.4m primary and 7.1m secondary shares at $13-$15 each. Shareholder Al Gharrafa Investment Co, a unit of Qatar Holding, has agreed to buy $7.4m shares at $13.44 each, as long as the total IPO raises at least $400m. A 4.3m share greenshoe is also possible. Adecoagro, which is involved in farming, energy production and land development, plans to use proceeds to fund construction of a sugar and ethanol mill in Brazil and expand its farming business, including land acquisitions. Credit Suisse, Morgan Stanley and Itau are global coordinators and joint bookrunners, with Deutsche as bookrunner. The largest shareholders, George Soros’ Pampas Humedas (34.0%) and HBK Investments (25.6%), expect to see their stakes reduced to 21.4% and 16.1%, respectively. Al Gharrafa holds 6.5%, and could see its holding grow to 11.2%. Adecoagro does not give a date for the sale.
Brazil Real Estate Targets Equity Follow-Ons
Brazilian homebuilder Direcional Engenharia and real estate broker Brasil Brokers have each set targets for follow-on equity offerings. Direcional estimates it will raise BRL370m, based on plans to sell 20.8m primary and 7.2m secondary shares at a BRL13.20 reference price. Shares closed at BRL13.10 Thursday. The builder is set to begin investor meetings January 21, with pricing scheduled for February 8. A 15% greenshoe and 20% hot issue are also possible. Ricardo and Ana Lucia Gontijo are the selling shareholders in the secondary portion. Direcional wants to raise funds for expansion and boost liquidity in its shares after a November 2009 IPO raised just BRL274m. Itau is leading the deal, joined by BAML, BTG and Santander. Brasil Brokers meanwhile plans to raise BRL200m by selling 21.8m shares at a BRL9.16 reference price. It closed at BRL9.43 Thursday. The issuer plans to start a roadshow January 26, and price February 3. A 15% greenshoe and 20% hot issue is also possible. Credit Suisse is lead manager, with Morgan Stanley and HSBC as bookrunners. Brasil Brokers went public in 2007. The real estate sector seems set for a busy quarter in the equity markets, as developer Tecnisa is also preparing to raise around BRL380 in a February 2 follow-on.
AEI Nears Deal with Consortium
Ashmore Energy International (AEI) could sign a deal to sell its assets to a consortium led by Iberdrola as soon as next week, according to sources familiar with the situation. AEI is heard to be looking to sell its assets for “a little more” than $4bn, half the $8bn price tag originally quoted in press reports. One banker away from the deal describes pricing as cheap for a company with $1.1bn in adjusted Ebitda for 2009 on $8.2bn in revenues. It is frequently compared to public US peer AES, with $4.6bn in Ebitda on $16.2bn of revenues for the last 12 months as of September 30, 2010. It was last trading at a market cap of around $10.22bn. The Houston-based energy company with assets in South America, Europe, Asia, the Middle East and Africa, had tried listing on NYSE in 2009. The offering would have given the company a market cap of $3.2bn, down from initial pricing of $3.9bn. Citi is lead advisor to the Iberdrola consortium, with Santander as a co-lead. Goldman Sachs is leading the sale, with Itau also advising the sellers. Brazilian power generation and distribution companies Neoenergia and CPFL are also heard to be part of the consortium. They are looking at AEI’s Elektro asset, a power generation and distribution company in Brazil. Previ, the Brazilian pension fund, owns stakes in both Neoenergia and CPFL and is understood to be active in the negotiations.