Brazilian Driller Launches IPO

HRT Participacoes has launched investor meetings for an IPO on Brazil’s Bovespa, expecting to price October 21. The Brazilian oil and gas operator would raise BRL2.62bn if it prices at the midpoint of its BRL1,050-BRL1,350 range and a rather large overallotment is fully exercised. The base deal is 1.62m shares, with the possibility for both a 324,000 share hot issue and 243,000 greenshoe that would increase the base by 35%. The base alone would raise BRL1.94bn at the midpoint. HRT says the transaction will result in at least a 25% float. It seeks funds to develop blocks in Brazil and Africa won since entering the E&P space last year. According to a prospectus, 75% of proceeds from the IPO will go to exploration in Brazil’s Solimoes basin, 15% for exploration on offshore blocks in Namibia, 2% to explore in other Brazilian blocks and 8% for other projects. What became HRT was founded in 2004 as its oil services arm, IPEX, by a group of former Petrobras and ANP executives, and would move enter exploration and production in 2009. HRT held 2 private share sales in 2009 to raise BRL479m, according regulatory documents and counts MSD Capital, Perella Weinberg Capital and Senator Investment among shareholders. Credit Suisse is global coordinator, with Citi and Goldman Sachs as bookrunners. The deal would give what the Brazilian market hopes is the first of several oil plays following Petrobras, though Repsol recently cancelled a $4bn spinoff.