Brazil Homebuilder Yanks Equity Issue

Following a reversal in regional equity markets, Brazilian homebuilder Gafisa has shelved plans to issue up to BRL700m in new and secondary shares. The company’s stock has slid 11% since it announced plans to raise equity June 2. “We don’t want to issue at these levels,” Gafisa CFO Duilio Calciolari tells LatinFinance. He adds that the deal has not been canceled, but postponed indefinitely. Gafisa would have until the end of July to issue under its current numbers, after which it will have to refile with its latest quarterly results. JPMorgan and Itau BBA were mandated to lead Gafisa’s follow on, which coincides with a surge in equity filings. “It’s too many deals all at the same time,” says a New York-based ECM banker. “People were hoping the stocks would trade better than they have,” he adds. He notes that Gafisa may not be the only issuer getting cold feet. Natura and BRMalls could also be reassessing their follow on plans, both of which were announced on a preliminary basis, adds the banker not involved in either deal. However, the decline in share price in both cases has been relatively minor, supporting the case for issuing. Meanwhile, MRV is slated to price its follow-on June 23, with VisaNet landing a jumbo IPO – up to BRL9.7bn – June 25.