Domestic Buyers Fuel Equatorial Sale

Brazil’s Equatorial Energia has priced a BRL1.42bn ($683m) equity follow-on, exercising its full overallotment in a deal heard multiple times oversubscribed. The transaction relied on local investor support and came at a 4.8% discount to the previous session’s closing price, with shares trading up 4.23% Friday. The energy holdco sold 89m shares, including a 15% greenshoe and 20% hot issue, at BRL16.00 each, according to the CVM. The hot issue consisted of secondary shares owned by controller Vinci Partners. More than 50% of the proceeds were said to go to Brazil-based buyers, with investors drawn to high dividend payments. About 70% of the proceeds are marked for capitalizing Centrais Eletricas do Para (Celpa), of which Equatorial bought control in September, with the remainder for acquisitions and working capital. Bradesco, BTG Pactual, Goldman Sachs and Itau managed the transaction. Equatorial agreed to buy 61.37% of heavily-indebted Celpa from Grupo Rede for BRL1.00, and is considering teaming up with CPFL Energia to buy all of Rede.