Celfin Capital will become a part of the BTG Pactual group, says the Chilean shop. The announcement helps clarify how the merger between the two banks might proceed. The Chilean brokerage with operations in Colombia and Peru and the Brazilian investment bank would “merge and all of the business and operations of Celfin and its subsidiaries would become part of the BTG Pactual group,” it says in a regulatory filing. It also notes that Celfin would “maintain in general terms the current administration of Celfin Capital, which would have as a principal responsibility the development, management and implementation of the BTG Pactual Group in the Andean region, including Chile, Peru and Colombia.” If completed, the deal would give BTG a foothold in the three Andean economies it has been eyeing, as well as allow Celfin to gain exposure to the Brazilian market. BTG announced talks about a merger Wednesday, without offering many details.
Category: Chile
Entel Preps Domestic Bond
Chilean telecom Entel is set to sell UF5m ($235m) in domestic bonds Thursday of next week. The issuer may chose among a 5-year CLP-denominated tranche paying a 6.1% coupon, a 5-year UF portion paying a 3.2% coupon and a 21-year tranche with a 3.5% coupon. The exact amounts and the yields are to be determined at the time of sale. Bice and IMTrust are managing the sale, currently on the road and rated AA minus on a national scale.
Celfin Tie-up to Give BTG Andean Path
BTG Pactual’s proposed merger with Chilean investment bank Celfin is seen giving the Brazilian investment bank a leg-up in establishing a beachhead to expand into the Andean region. The union between the two shops will create Latin America’s largest investment bank, BTG says, and marks its first Latin American expansion outside of Brazil’s borders. The two announced the beginning of merger talks Tuesday, but gave few details about how they are expected to proceed. It is thought however that BTG will most likely buy most or all of Celfin. “It looks like an acquisition given the difference in size between the two,” says a senior official at another Santiago-based bank. Celfin lists AUM at $5.5bn, while BTG has more than $60bn under management. A value for Celfin, a private partnership, is difficult to pin down. Celfin officials have expressed a desire for Brazilian exposure as part of their bid to become a regional investment bank after already expanding into Colombia and Peru. But gaining a foothold in the region’s largest market was clearly difficult. Brazilian rival Itau tapped into Chilean wealth management through a JV with Chilean brokerage Munita, Cruzat & Claro, in which MCC still operates independently. Celfin has cross-selling agreements with Mexico’s GBM, and its Brazilian unit. BTG CEO Andre Esteves told LatinFinance earlier this year that moves into Colombia, Chile and Argentina were likely next steps, and to expect operations there as soon as this year. BTG recently filed initial registration with the CVM, the first step towards an IPO. Founded in 1988, Celfin is owned by 6 partners, including Juan Andres Camus and Jorge Errazuriz.
Chilean Generator Readies Offering
Grupo Saesa is set to begin investor meetings today ahead of a UF2m ($94m) domestic bond offering. The 30-year bonds will pay a coupon of 3.35% and price within the next 2 weeks. Proceeds are marked for debt refinancing. BBVA Chile and IMTrust are managing the sale, rated AA on a national scale.
Chile Heard Awarding Mandate
Chile is heard awarding a mandate to two banks for an international bond transaction, putting the sovereign one step closer to going to market. An official announcement has yet to be made, but HSBC and JPMorgan are thought to be favorites given they helped lead the sovereign’s last transaction in 2010 when it priced a $1.5bn 2-tranche USD and global CLP-denominated 10-year offering, rated Aa3/A/A+. Deutsche Bank may also be a contender as it has clinched several Chilean corporate mandates over the years. The sovereign has expressed interest in a benchmark transaction with the idea of raising up to $1.5bn in 2011.
Chile’s SK Buys Belgian Mining Supplier
Just a day after offloading its white goods unit, Chilean conglomerate Sigdo Koppers has agreed to purchase Belgian portfolio company Magotteaux for EUR550m ($790m). The two deals allow SK to turn its focus more completely on mining services, and is the largest-ever acquisition by a Chilean targeting assets outside of LatAm, according to Dealogic data. SK emerged the winner in a sale process started earlier this year by Swedish private equity firm IK Investment Partners for the manufacturer of crushing and grinding parts for use in the mining and cement industries. A group of international interests had been bidding for Magotteaux, including Australian miners OneSteel and Orica and private equity investors including Advent International and Doughty Hanson. BNP Paribas advised Sigdo Koppers, and is supplying an 18-month bridge loan to fund the acquisition. Morgan Stanley advised IK. SK has interests in the construction, industrial and transportation sectors, which are mostly related to the mining industry. The deal follows the strategic shedding of SK’s CTI white goods unit to Sweden’s Electrolux for $691.5m, announced Monday.
Eletrolux Gets CTI for $692m
Sweden’s Electrolux has agreed to buy 64% of Chilean appliance maker CTI for $691.5m equivalent. Following the announcement of talks last week, the global appliance manufacturer will buy Chilean conglomerate Sigdo Koppers’ 51% stake, as well as 13% from other investors. A tag-along offer to the remaining minority holders, at CLP34.87 ($0.074) per share, will follow. Electrolux will also launch a tender offer for all of the outstanding shares of CTI’s listed subsidiary Somela for CLP325 per share, with CTI committed to tender its 78.5%. CTI’s net income from the sale of its shares in Somela will be distributed to its shareholders through a pre-closing dividend of CLP4.39 per share. CTI will also pay a pre-closing dividend to its shareholders of CLP1.63 per share. Electrolux values CTI at a CLP318bn total enterprise value, a spokesman says. This would indicate a level of 9.3x CTI’s CLP34.17bn 2010 consolidated Ebitda. Morgan Stanley and law firm Carey y Cia advised Electrolux. A Sigdo Koppers official says it did not use an advisor.
Chile Moves Closer To Foreign Foray
Chile is inching closer to tapping the international bond markets this year after sending request for proposals (RFPs) for a potential bond issue, bankers say. While details have yet to be disclosed, the sovereign has in the past expressed interest in a benchmark transaction with the idea of raising up to $1.5bn in the international capital markets in 2011. Earlier this year, Finance Minister Felipe Larrain was quoted saying that CLP or USD issues were on the table. Chile’s reluctance to return to market since its blowout dual-tranche issue last year was partly driven by fears that offshore offerings would put upward pressures on the peso. Where Chile will come along the curve or if it will try global pesos is still open to debate. Ignacio Briones, the country’s head of public credit, told LatinFinance in March that 5, 10 or 30-year bonds were all a possibility. The sovereign last came to market in 2010 when it priced a $1.5bn 2-tranche USD and global CLP-denominated 10-year bonds with Citi, HSBC and JPMorgan. The bonds were rated Aa3/A/A+. Briones said in March that the public credit’s principal goal was to achieve a tighter spread than the UST+90bp it locked in on its last 10-year. But spreads may be somewhat irrelevant this time around given how tight USTs have been trading and the sorts of yields borrowers can potentially lock in. The sovereign’s US dollar 10-year was first priced at 99.877 with a 3.875% coupon to yield 3.89%, but it is now trading at around 2.96% or 85bp over.
Electrolux Confirms Chile Talk
Sweden’s Electrolux has confirmed it is in discussions with Chilean Sigdo Koppers about the acquisition of home appliance manufacturer Compania Tecno Industrial (CTI). The Chilean conglomerate had indicated previously it was negotiating the sale of its 50.1% stake in CTI, and Electrolux had been thought to be the likely candidate. The value of such a deal, which would include Somela in Chile and Frimetal in Argentina, is seen at more than $600m. TCI shares closed at CLP34.99 Friday with Sigdo Koppers shares closing at CLP800.20.
Chile Holds Rates
Chile’s central bank decided to keep the country’s benchmark interest rate at 5.25% for the second straight month, in line with market expectations. In a statement, the bank notes a decline in global inflation expectations as developed world economies slow. With inflation hovering around a 3% target, analysts expect the bank to keep rates on hold for the remainder of the year.