Alupar Launches IPO

Brazil’s Alupar Investimento has launched an IPO, targeting more than BRL900m ($448m) and pricing April 22. The holding company for electric transmission and generation operations, familiar to Brazil’s domestic debt markets, plans to sell 40m primary units at BRL18.50-BRL21.50 each, according to offering documents, indicating a BRL920m sale at the midpoint. The total assumes a 15% greenshoe. A 20% hot issue is also possible. A unit is made up of one Alupar ordinary share and two preferred shares. The issuer is raising funds to be used 80% for obtaining and developing new concessions, and 20% for acquisitions. Alupar booked BRL917m in Ebitda in 2012, after getting BRL762m in 2011 and BRL657m in 2010. About 87% of its revenue comes from the transmission operations, consisting of 5,700km of lines in Brazil and Chile. Alupar operates 179 megawatts of generation capacity and has 484 megawatts under development, through five hydroelectric assets in Brazil and Colombia and one Brazilian wind farm. BTG Pactual, Credit Suisse, Goldman Sachs, Itau and Santander are managing the transaction, which the issuer had filed for last year but held off, refiling this year. Alupar is 93% owned by the Godoy Pereira family, with the remainder held by the FGTS workers’ guarantee fund. Bad news has come out of some parts of the Brazilian electricity sector recently, though the last two ECM deals in the sector – Equatorial Energia in December 2012 and Taesa in July 2012 – received strong investor response. The Brazilian March-April pipeline got off to a strong start with the well-bid BRL705m follow-on for mall operator Multiplan, though airline rewards program operator Multiplus cancelled a sale due to poor conditions. The next up is sugar, ethanol and bioenergy producer Bisoev, targeting BRL800m in an April 15 sale. IPOs from Gol’s Smiles and Banco do Brasil’s insurance business are due to follow, among others.