Brazilian clothing retailer Guararapes Confecções has hired banks for a potential follow-on share offering to expand its business.
The primary offering would raise BRL400 million ($80 million) initially, the company said in a securities filing on Monday.
Guararapes would use the proceeds to expand and refurbish existing stores and open new ones, as well as to invest in distribution centers and its consumer credit arm and to boost working capital. The family-owned business has more than 400 Riachuelo-branded stores nationwide.
Itaú BBA is the lead coordinator for the transaction, with BTG Pactual, Bradesco BBI and UBS BB as joint bookrunners.
“We believe a potential primary deal would likely aim at increasing liquidity,” XP private equity analysts said in a note to clients. “This may also signal that the controlling family still sees significant value to be unlocked, but current liquidity remains a constraint to fully materializing this potential. A follow-on could help address this issue.”
DEBT ISSUANCE
Meanwhile, two Brazilian infrastructure companies announced plans to sell so-called incentivized bonds in the local market next month.
Power distributor Energisa said four of its subsidiaries intend to raise BRL1.8 billion in a sale of notes due in 2036 and 2041, the company said in a release.
Its unit in the centre-west state of Mato Grosso aims to raise the lion’s share (BRL1 billion), followed by Energisa subsidiaries in the northern states of Tocantins (BRL330 million), Paraíba (BRL250 million) and Sergipe (BRL200 million).
The deal is due to be priced on March 5, with Bradesco BBI leading the transaction and XP, Citibank, ABC, Itaú BBA, Safra and Santander as joint bookrunners.
The proceeds of incentivized debentures must be used exclusively to fund infrastructure investment, and buyers of the notes benefit from tax breaks.
Local railway operator MRS Logística, for its part, said it intends to print BRL1.2 billion worth of such debentures to fund investments in the port of Santos, near São Paulo.
It expects to price the 2041 notes on March 13, with UBS BB leading the transaction and Santander as the bookrunner.