Category: Chile

Omega, the parent company of Chilean supermarket chain Supermercados del Sur, is planning to merge with La Polar, a retailer that operates several department stores and shopping malls in the country. A valuation study by Larrain Vial shows that the merged entity would have a market cap of CLP828bn, or CLP2,326 per share. La Polar says in a filing to the local securities commission that it would own 62% of the new company and Omega the remaining 38%. As part of the deal, la Polar will exchange 135.2m of its shares at 1.07 unit per Omega share. Larrain Vial says the merged company will have $1.5bn in combined sales and says the deal would allow for improved purchasing power, centralization of operations, increase in non-food sales and an opportunity to grow further through acquisitions. La Polar shares closed Thursday at CLP1,945.6, up 15.20%. Omega is controlled by Southern Cross Latin America Private Equity Fund.

Chilean power generator Empresa Electrica del Norte Grande (Edelnor) is taking out a $50m short-term bank loan to help prepay $187m in debt to ABN AMRO, the company says in a filing with the SVS securities superintendent. Edelnor plans to repay the principal and interest on the loan, which was signed in 2002, July 7 with its own funds and the bank loan.

Luxottica Group, the Italian sunglass producer, has bought for EUR40m a 40% stake in retailer Multiopticas Internacional, which runs the GMO, Econoptics and SunPlanet retail brands in Chile, Peru, Ecuador and Colombia. Luxottica calls South America “a region with excellent growth potential.” Under the terms of the agreement, which is expected to close by the end of June, Luxottica will have a call option for the remaining 60% of Multiopticas. The call will be exercisable between 2012 and 2014 at a price to be determined on the basis of Multiopticas’ sales and Ebitda values at the time of the exercise. Last year, Multiopticas’ 393 stores in Chile, Peru, Ecuador and Colombia posted total sales of approximately EUR60m. In 2009, the company expects to open an additional 90 stores in the region, says Luxottica.

Aguas Andinas has sold UF3m ($110m) in inflation-linked bonds in the Chilean market. The water utility priced UF2m 2015 bonds with a 3.1% coupon at 99.24 to yield 3.88%, and UF1m in 2017 bonds with a 3.6% coupon to yield 4.27%. The unit of Spain’s Aguas de Barcelona plans to use proceeds to help fund investments at its subsidiaries. Larrain Vial and BBVA managed the transaction, rated AA+ on a domestic scale.

The Mall Plaza unit of Chilean retailer Falabella has sold UF5m ($190m) in inflation-linked bonds in the domestic market. The shopping mall operator priced UF2m in 3.00% 5-year coupon notes at 95.87 to yield 3.94%, followed by UF3m in 4.50% 21-year bonds featuring a 10-year grace period at 97.82, to yield 4.70%. Proceeds from the AA minus/A+ sale will fund debt refinancing. IM Trust and Banchile managed the transaction. On tap today in the Chilean DCM is the sale of up to UF3m in 2015 and 2018 bonds from water utility Aguas Andinas, via BBVA and Larrain Vial.

Antofagasta has closed a $1.05bn 12-year project financing for its Esperanza copper-gold project in Chile, which is 30% owned by Marubeni. A spokesman for the borrower says the all in cost of funds is approximately 6% in nominal dollar terms. Of the total, JBIC contributed $400m, EDC $200m and KfW IPEX-Bank $50m. The remaining $400m comes from a syndicate including MLAs and joint bookrunners Bank of Tokyo Mitsubishi-UFJ (trustee and collateral agent), Calyon (admin and documentation agent), ING (technical agent), Mizuho (JBIC co-ordination agent), Sumitomo Mitsui (insurance agent) and arrangers Santander and Natixis. The Antofagasta spokesman declines to reveal the spread on the syndicated loan. “The sponsors will provide certain completion guarantees for the financing, pro-rata to their ownership interests, until the project has satisfied certain specified completion tests, at which point the financing will become non-recourse to the sponsors,” says Antofagasta. The balance of the project’s $2.3bn total estimated capital cost – including working capital and financing costs – from the commencement of construction in Q3 2008, is being funded by the sponsors pro-rata to their ownership interests. Rothschild acted as financial advisor to the sponsors and Minera Esperanza, Sullivan & Cromwell acted as project New York counsel, and Jara, del Favero as Chilean counsel.

Chile-based investment firm Sociedad de Inversiones Oro Blanco says it plans to sell up to 126m shares of affiliate Sociedad de Inversiones Pampa Calichera, in which it holds an 83.23% stake. Pampa Calichera has a 27% stake in chemical company SQM. Oro Blanco says it will sell the shares for a minimum price of CLP545 on the Santiago exchange. It also says it will use the proceeds to pay down debt. Oro Blanco approved the share sale May 13.

Aguas Andinas is preparing to place May 20 up to UF3m ($110m) in inflation-linked bonds in the Chilean market. The water utility plans to sell a combination including 3.1% of 2015 and 3.6% of 2018 bonds up to a UF3m limit. Proceeds will help fund investments at Aguas Andinas’ subsidiaries. Larrain Vial and BBVA are managing the transaction, rated AA+ on a domestic scale. The unit of Spain’s Aguas de Barcelona last visited the local market in April 2008, selling $109m equivalent in UF-denominated 3.000% of 2014 bonds to yield 3.223%. The deal is set to follow the May 19 sale of up to UF5m from Falabella’s Mall Plaza unit, through IM Trust and Banchile.

Chilean retailer Falabella has sold CLP31.4bn ($56m) in 2015 bonds on the domestic market. The 5.30% notes were priced at 96.23 to yield 6.28%. Banchile and Larrain Vial are managing the sale, rated AA on a national scale, which will help fund the repayment of debt. The peso-denominated placement follows the sale two weeks ago of $228m-equivalent in 2015 and 2033 inflation-linked bonds. Next week, Falabella’s Mall Plaza unit is expected to sell up to UF5m ($186m) in inflation-linked bonds.

Chilean copper miner Codelco, which is heard entertaining pitches from banks to raise some $400m in 3-year funds, is heard to also be considering raising funds on a bilateral basis as one of the options for any potential new facility. This strategy has already been deployed by quasi sovereigns like Petrobras and Pemex. Earlier this year, Petrobras raised over $5bn in bilaterals and followed up with a $1.5bn 10-year bond. Pemex was heard seeking $1bn in bilateral loans ahead of its MXP10bn local market bond issue. Appetite for bank lending appears to be picking up, and Codelco and the region’s other highly-rated borrowers will be first to benefit, say bankers. One banker says Codelco isn’t aggressively seeking out funds, but rather is being propositioned by lenders which see an upcoming maturity later this year. “Banks are throwing cash at [Codelco,]” remarks another syndications official. While pricing for 3 years was first proposed at or just below the 275bp over Libor that Bimbo paid in March, eagerness on the part of the pitching lenders and Codelco’s apparent coolness on the proposed levels has helped push pricing discussions down to the 225bp range, says one lender. Negotiating bilaterals, while more cumbersome in some ways, gives the borrower greater ability to lean on a relationship to obtain lower costs, since pricing need only be designed to satisfy one lender. ENAP, the state-owned oil company, is also heard close to issuing an RFP for an up to $500m facility, also in the 3-year range. One banker says that borrower may also look to do raise the funds on a bilateral basis too.