Mexican fertilizer company Fertinal is a good strategic match for US-based Mosaic, according to a mining M&A banker in Mexico. According to press reports, Mosaic is in talks to buy Fertinal for about $1bn. “The market would welcome Mosaic’s acquisition of Fertinal,” says the banker, who is at a boutique not working on the transaction. “Mosaic could make the necessary investments to get the company to produce phosphate rock again,” the banker says. He explains that the company has had to buy phosphate rock from third parties after a hurricane impacted its Baja California mine in 2001. He also says Fertinal has a processing plant in Lazaro Cardenas, Michoacan that he believes to be very valuable in a strategic sense. “It is in a privileged location,” he explains. The deal would also be beneficial to Mosaic, the banker says, adding that “it makes all the sense in the world for Mosaic to buy Fertinal so it can expand in a market where it doesn’t have an industrial presence.” Fertinal has been up for sale for a while. In the first half of 2008, Fertinal began exploring options to recapitalize and restart operations, hiring UBS to advise. Calls to UBS bankers to see if they were still advising Fertinal went unanswered. Mosaic does not return calls for comment.
Category: Paywall
Camargo Correa Shops in Africa
The cement unit of Brazil infrastructure conglomerate Camargo Correa says it is acquiring a 51% stake in Mozambique-based Cimentos de Nacala from investment company Grupo Insitec, also based in the African country. It does not disclose the price it is paying. Insitec will keep the remaining 49%. Calls to Camargo Correa and Insitec were not returned. Cimentos de Nacala has capacity to produce 350m tons of cement a year.
Chile Heard Awarding Mandate
Citi and JPMorgan are heard having won mandates for a new bond transaction from Chile, according to DCM bankers. It is not certain if any additional banks have also been named. Shops all over the street have been pitching the sovereign ever since it announced in April that it planned to tap the dollar markets for the first time since 2004, to help raise funds for earthquake reconstruction. A formal RFP was circulated last month. The sovereign is considering raising $500m through a debut peso-denominated global issue, as well as $1bn in 10-year dollars. Though it was expected to be able to come to the market as soon as this month, the sovereign is seen waiting out the current downturn in global markets.
Magnesita on “Non-Deal” Show
Brazil’s Magnesita Refratorios is meeting US equity and fixed income investors this week, on a “non-deal” roadshow, investors say. The B1 rated manufacturer of refractories for Brazil’s steel industry has visited Asia and Europe and is hitting New York, Boston and Los Angeles this week. Magnesita came to the DCM in March, raising $400m in 7.875% of 2020 NC5 bonds, priced to yield 8.000%. Itau, one of the joint leads on the March deal, is running the meetings.
Comerci Holders Approve Debt Plan
Comercial Mexicana shareholders have approved a $1.54bn debt restructuring plan reached last month with derivatives counterparties and other creditors. Under the agreement, which also requires the approval of creditor committees, the Mexican retailer will issue various tranches of new MXP and USD debt, with an average maturity of 6.7 years. It consists of MXP16.32bn in fixed-rate debt paying 9.25% and floating-rate debt paying TIIE plus 275bp-400bp, as well as $226.3m in 7% dollar bonds. The deal also includes a cash payment of $45m on closing, and a lock-up fee for certain bondholders equivalent to 1 percentage point of principal amount held. The agreement excludes MXP1.5bn in domestic bonds recently swapped for new 7-year notes, and the new debt is backed by the company’s real estate holdings and stock. Comerci defaulted in 2008 after severe derivatives losses.
BdB Waits a Day for Follow-On
Banco do Brasil (BdB) plans to price its equity follow-on June 30, it says in regulatory filings, rather than June 29 as previously indicated. The bank is set to offer 286m primary and 70.8m secondary shares on the domestic market, a deal that would raise more than BRL9.8bn if done at Monday’s BRL27.50 close. Investors may reserve shares from June 21 through June 29. Trading is expected to begin July 2. Government-controlled BNDESPar units of state-controlled Caxia bank are offering the secondary shares. The bank plans to use 85% of proceeds to increase lending capital and 15% for growth through acquisitions, it says. BdB and Bank of America Merrill Lynch are global coordinators, with BTG Pactual, Citi and JPMorgan as coordinators. Bradesco BBI, Espirito Santo Investment, Safra, Santander and Votorantim are co-managers.
PE Upstart Raising Mining Fund
Mexico-based Vander Capital Partners is raising a mining-focused private equity fund that could raise up to $175m. The vehicle is aimed at providing growth capital to smaller miners that have difficulty raising funds. “We are focused on small players that want to be larger. There are a lot of small companies with no access to financing,” says founder Roberto Charvel. The vehicle has raised 35% of its $175m goal, and Charvel expects it to reach 50% by first close, which should be by year-end. The fund is expected to be 80% invested in Mexico and 20% in other markets, mainly Colombia and Peru, Charvel says. Charvel notes that a significant portion of commitments have come from Canadian investors. Vander Capital was founded in 2009.
Pemex Mulls DCM Reopening
After meeting investors last week on a non-deal roadshow, Pemex is heard considering reopening cross-border DCM for LatAm. Investors say the Mexican state-owned oil producer is watching markets with a view to issuing $1bn or more. Deutsche Bank and HSBC managed the investor meetings. Bankers on the roadshow say that meetings were non-deal and that no immediate transaction is planned. LatAm issuers abruptly put bond plans on hold at the end of April, as global risk aversion set in due to the European sovereign debt crisis. During the downturn, bankers and investors have said it would take one of the region’s blue-chip issuers to reopen the market, noting that investors still have money to allocate to LatAm. Pemex fits the bill, investors say. Prior to a MXP15bn May bond sale, Pemex had said it plans to borrow $6.3bn during the remainder of 2010, including $4.2bn-$4.4bn from capital markets. The oil giant has twice tapped domestic markets for transactions of MXP15bn each this year, and raised $1bn in 6% 2020 bonds in January.
Mexico Gets WB Loan
The World Bank has approved a $450m loan for Mexico to be used to adapt its water sector to climate change. The facility is a variable interest rate loan based on 6-month Libor, plus a variable margin, with an 18-year maturity period. The opening fee has been fixed at 0.25% of the total sum. The project is expected to end on December 2012.
LatAm Equity Takes Outflow Hit
The recent spike in risk aversion continues to weigh on LatAm equity funds, according to EPFR Global, which adds that they posted their ninth straight week of outflows in the week ended June 9. EPFR says investors shied away from the populist rhetoric, high inflation and statist economic policymaking that it says characterize many of the region’s markets. GEM equity funds posted inflows for the second week in a row. As for performance, Lipper data show that LatAm equities were up 1.37% in the week, but have dropped 7.97% year-to-date. EM funds lost 0.73% in the week and 5.14% ytd. Global small and mid-cap funds lost 1.35% in the week and 1.71% ytd.