Brazil Bank Drops Off Renova IPO

Brazilian renewable energy specialist Renova has launched its IPO with an offering document published in local papers. The company is targeting a March 17 sale of up to 33.7m primary units that could yield as much as BRL741m. Updated materials show Santander and BofA-Merrill as joint-lead bookrunners. Renova no longer names Itau BBA, which was listed as the deal’s third bank in a prospectus filed earlier this year with the CVM. Bankers on the deal offer a variety of explanations for the departure of the Brazilian bank. Executives familiar with Itau BBA’s view suggest disagreements on timing of the deal led it to walk away. Meanwhile, executives away from Itau BBA suggest the shop may have chosen to purse another mandate that was contingent on it quitting Renova. In either case, Itau was third bank and likely stood to earn weakest economics on the deal. Santander is lead coordinator and BofA-Merrill is stabilizing agent. Through its project finance units and an infrastructure fund called Infra Brasil, Santander has several business ties with Renova. Renova has recently won a series of wind energy blocks to develop via a large government auction and is seeking capital for those and new projects by issuing primary stock. The offering is made up of 24.7m shares plus a 3.9m unit greenshoe and a 5.1m unit hot issue. The price range is BRL19.00-BRL25.00.