Mexican chemical producer Mexichem has agreed to acquire the fluor unit of INEOS Group, a UK-based manufacturer of petrochemicals. The transaction is estimated to be valued at around $300m-$350m, or 5x Ebitda, according to a Mexico-based equity analyst who covers Mexichem. The analyst also estimates that this acquisition will contribute to a sales increase of 7%-14% to Mexichem. The buyer is paying cash for the asset. “Mexichem has the resources to pay without increasing its debt levels because in late 2009 it issued $350m in bonds,” the analyst says. Moody’s says that the acquisition will not affect Mexichem’s Ba1 rating or its stable outlook. Meanwhile, an INEOS spokesman in London says that the divestiture of the fluor unit is part of the company’s efforts to strengthen the balance sheet. He adds that Barclays advised the seller.
Category: Daily Brief
Wong to Unload Cencosud Stake
Peru’s Wong is selling its stake in Chilean retailer Cencosud, according to a regulatory filing. The planned auction of 49.75m shares would bring in CLP91.64bn ($170m) at Wednesday’s price. Wong acquired the shares – equal to a 2.3% stake – when it sold its supermarket chain to Cencosud in 2007. It does not indicate when it plans to sell the shares. Cencosud closed Wednesday at CLP1,842, down 1.4% from the previous day.
DomRep Government Authorizes Bond Issue
The Dominican Republic has authorized the finance ministry to issue up to DOP21bn ($583m) in bonds to stimulate local credit markets, the president’s office announced. The issue will be done in 6 tranches. A 2013 tranche of up to DOP4bn will have a 12% coupon, a 2015 tranche of up to DOP4bn will have a 14% coupon, and a 2017 tranche of up to DOP4bn will have a 16% coupon. Still pending are the coupons on 3 more tranches of up to DOP3bn maturing in the same years. Previously, the Dominican Republic had unveiled intentions of coming to international markets in Q1 2010, saying it wanted to borrow $500m-$600m. Bankers had expected a 10-year bond through Barclays and Citi.
Pemex Rings MXP DCM Revival
Starved of sizeable domestic corporate issuance for months, Mexican investors today are set to get a chance to fill up on an expected MXP10bn-MXP15bn in new Pemex bonds. The state-owned oil producer can choose at the time of the sale between 5-year MXP-denominated floaters and 10-year fixed-rate notes in MXP or UDIs. Proceeds are marked for debt repayment, investment and general corporate purposes. BBVA, HSBC and Santander are managing the sale, rated AAA on a national scale. As with its pair of MXP10bn issuances in April and May of 2009, Pemex offers a hefty transaction that could help open up local DCM, as last year’s dispute between institutional investors and issuers over bond covenants and sale protocol has made it tough for all but the county’s bluest-chip corporate borrowers. It would be the first corporate offering in Mexico since Holcim Apasco priced a 2013 MXP950m trade receivables securitization in December, according to LatinFinance data.
Banco Votorantim Not Done in DCM
Banco Votorantim is planning to splash some senior debt on top of its recently raised $750m in Tier 2 capital. The Brazilian bank that is majority owned by Grupo Votorantim is readying 3-year senior bonds, of an undetermined size. Pricing is expected early next week, according to bankers managing the sale. BNP, Banco do Brasil, Bradesco and UBS are the leads and the deal is rated Baa2. Votorantim’s 2020 Tier 2 sale saw demand of $3.6bn and priced at par with a 7.375% coupon. BofA-Merrill Lynch, Banco do Brasil, Deutsche Bank and Itau managed that sale. Banco do Brasil owns 49% of Banco Votorantim.
Rough Landing for Multiplus IPO
Multiplus, the miles program for TAM, has priced an IPO well below the bottom of the range amid substantial turbulence. “The IPO market is not as simple today as some people would think,” says a banker on the deal, downplaying the fact that the deal priced at 24% below the BRL21.00 midpoint and 11% under the bottom of a wide BRL18.00-BRL24.00 targeted range. The deal’s 39.3m shares priced at BRL16.00, resulting in proceeds of BRL629m. A 15% shoe will be exercised, bringing total proceeds to BRL724m. A 5.9m share hot issue was not exercised, say executives on the trade. Had the company issued all of the units at the midpoint, total proceeds would have been BRL1.1bn. A US-based investor who had expressed interest said that on the day before pricing, most of the interest in Multiplus was at the lower part of the range. BTG Pactual and Credit Suisse led the deal, the year’s second IPO. Aliansce, the first, priced 22% below its targeted midpoint. Investors remain picky and markets are have lacked conviction in the past week, making for challenging conditions to float new equity. Two other follow-ons have already been pulled this year, namely Metalfrio and M. Dias Branco. Today, Brazilian homebuilder PDG Realty is scheduled to price a BRL1.7bn follow-on. Investors say priority investors and Vinci, the fund that has committed to purchase a part of the offering, already account for a full book. Other buyers are expected to commit.
Voto Swoops in on Cimpor Stakes
Votorantim Cimentos has struck an agreement with Lafarge to purchase its 17.8% stake in Cimpor through a share swap. In addition, Voto says it has arrived at a shareholders agreement with Caixa Geral de Depositos, the Portuguese bank that owns 9.6% of Cimpor, to act together, essentially forming a bloc. While the move does not completely scupper attempts by CSN and Camargo Correa to strike deals with Cimpor, it is a substantial victory for Voto. The latter quietly stood by in the month and a half since CSN made first announced its intention to acquire Cimpor shares at EUR5.75 apiece in December. CSN is offering to purchase up to all of Cimpor’s 672m shares through a public tender, a move that has been twice rejected by Cimpor’s board. Camargo meanwhile offered to merge its operations with Cimpor. However, it retracted its bid last week, citing procedural reasons linked with the public bidding process in Portugal. Camargo has stated that it has not given up its pursuit of a deal with Cimpor. CSN says its public tender process will continue unaltered by the news. Voto says it hired Deutsche Bank in 2008 to eye strategic options and internationalization. CSN is advised by BES, and Credit Suisse and BofA-Merrill are advising Camargo.
Nomura Plots LatAm Comeback
Japan’s Nomura Securities seeks an expanded role in LatAm and is deciding how best to allocate new staff and resources to a region where it was active until the late-2001 Argentine debt crisis. “We are now considering what we can do in the emerging markets and in Latin America,” Takeo Sumino, COO at Nomura Holding America, tells LatinFinance. “We have been very quiet in Latin America for a while – just because Japanese investors had a bad memory of the Latin American crisis – so they’ve been shying away from Latin American credit,” he says. Awareness is increasing as more Japanese firms do business in LatAm. Sumino says Brazil is the first area of focus for his bank. Nomura Asset Management expects to close this month a $1.0bn-$1.5bn Brazilian infrastructure fund marketed to Japanese investors. “It will be one of the first of its kind in terms of dedicating a fund towards Brazilian corporate equity,” Sumino says. He adds that fixed income underwriting in the region is a strong option for the bank to consider. Nomura jointly led a JPY150bn ($1.7bn) 2019 December bond sale for Mexico. Colombia also issued in yen last year with a JBIC guarantee, and bankers say that quasi-sovereigns or even corporates could diversify their funding base by tapping the Japanese investor base. Sumino says Brazil is a leading candidate for yen issuance, and Chile and Peru should also be able to access the samurai market. Nomura also wants a bigger presence in LatAm cross-border M&A. Nomura’s New York office has grown from a staff of 650 to about 1,300 in the last 5 months, Sumino says. The bank has not yet decided about adding in LatAm, where a Sao Paulo rep office houses 2 bankers.
Nextel Peru Dials A/B Loan
Nextel’s Peruvian arm has raised a $130m A/B loan to grow its mobile operations in the country. The deal, which closed over the holiday break, includes a $50m 7-year A loan from FMO, with participation from DEG, at Libor plus 575bp. There is also a B loan paying 475bp for 3 years, 525bp for 5 years and 575bp over Libor for 7 years, via a group of commercial lenders led by Standard Bank. The B loan syndication included participation from several regional lenders, including BCP and Banco BIF, as well as Panama-based Tower Bank, Multibank, Banco Aliado and Global Bank, according to a banker close to the deal. US-based CIFI also participated, as did HSBC in the B portion. The deal began syndication in Q4 last year and wrapped up in the final 2 weeks of 2009.
BNDES Launches World Cup Loan Programs
Brazil development bank BNDES presented its BRL1bn ProCopa Turismo financing program to hoteliers. The program will offer financing for renovation projects and construction of new tourism facilities. The loans will have terms of up to 12 years for renovation projects and up to 18 years for the construction of new facilities. Margins will include a fixed-rate base spread that ranges from 6.9%-8.8% plus a credit spread. BNDES is also launching the ProArenas program, will make available BRL4.8bn to finance up to 75% of the construction of stadiums and other urban infrastructure. Each project will have access to loans of up to BRL400m that bear interest rates of TJLP plus the 0.9% BNDES spread plus a borrower-specific credit spread. Tenors can be up to 15 years with 3-year grace periods.