Brazilian insurance company SulAmerica is acquiring dental care provider Dental PLAN for BRL28.5m ($16.8m), or almost 2x 2009 revenue. SulAmerica CEO Thomaz Cabral de Menezes says in a statement that the acquisition will help expand SulAmerica’s presence in the North and Northeast regions of Brazil and allow the company to broaden its range of products and services offered by health and dental care segments. Dental PLAN had revenues of BRL15m in 2009 and has a network of 5,000 dentists. Barclays says this acquisition marks a more solid entrance into a high-growth segment, which is still very fragmented.
Category: Corporate & Sovereign Strategy
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Vitro Files for Mexican Bankruptcy
Vitro has filed for the concurso mercantil bankruptcy process in Mexico and plans to begin Chapter 15 proceedings in the US and seek creditor protection for its US units. The company said Monday it would have to delay payments of $44m to bondholders who accepted a cash portion in Vitro’s $1.2bn restructuring offer, after a bondholder group claiming to represent $650m in Vitro debt and which opposes the offer filed to block it. A bond-for-bond portion of the restructuring offer closes December 21. Rothschild is Vitro’s financial advisor in the process.
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Correction: Fitch Chops Javer to B Minus
A December 13 Daily Brief entitled “Fitch Chops Javer to B Minus” incorrectly states the nature of the move. Fitch downgraded the firm’s issuer default rating to B (stable) from B+ and it also cut $210m in senior unsecured notes to B+ from BB minus.
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S&P Batters Lupatech Rating
Lupatech’s perpetual notes have been downgraded by S&P to CCC from B minus, with a stable outlook. The rating action is a result of persistently weak operating results because of cashflow generation, a highly leveraged capital structure and relatively tight liquidity, client concentration and low bargaining power as well as increasing requirements for capex and working capital, and low capacity utilization and challenges to ramp up production. Barclays says that the fact that BNDES is a lender and that Petrobras is the main offtaker of the company’s output helps mitigate some of the immediate default risk. However, it adds that in the short-term there is more downside than upside potential.
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Fitch Chops Javer to B Minus
Fitch has chopped the ratings of Mexico-based homebuilder Javer to B from B minus. The outlook is stable. The downgrade reflects Javer’s increased leverage as a result of lower cashflow generation, measured by Ebitda, as well as the view that the company’s strategy to resume growth during 2011 will limit its capacity to generate positive free cash flow. Javer’s revenue and Ebitda levels for the first 9 months of 2010 were MXP2.57bn and MXP408m, respectively. These figures represent declines of 25.2% and 39.9% below those achieved by the company during 2009’s same period.
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LatAm Exports Seen Growing 29%
The IDB forecasts that LatAm’s exports will have increased by 29.0% in 2010 to around $853.0bn. A year earlier they had dropped 23.0%. Intra-regional exports grew 27.0%, while extra-regional flows expanded nearly 30.0%. Intra-regional trade as a share of LatAm’s total trade with the world stands at an estimated 17.5%, slightly lower than last year’s 17.8%. Paraguay led the Mercosur regional grouping with 39.7% growth in exports, while Brazil, Uruguay, and Argentina saw their exports grow by 29.7%, 24.6%, and 24.0%, respectively. Exports by Peru grew 35.2%, Ecuador 28.8%, Bolivia 27.5%, and Colombia 21.2%, while Chile’s exports rose 38.5%. Mexico’s exports are projected to grow by a third this year. In CentAm, Nicaragua’s exports increased 30%, while Guatemala, El Salvador, Honduras, and Costa Rica grew at respective rates of 16.0%, 15.9%, 13.8%, and 9.1%.
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Posadas Takes Rating Hit
Moody’s cut its rating for Mexico-based hotel chain Posadas to B3 from B2, with a negative outlook. According to the ratings agency, the move reflects the company’s limited financial flexibility, with high debt leverage, low cashflow generation and stagnant revenue growth.
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Vitro Readies Bankruptcy
Vitro plans to file for bankruptcy through Mexico’s concurso mercantil process by December 16, it says. The Mexican glassmaker has “has the requisite majority, among debt controlled by Vitro, debt subject to lock-up agreements and consents received through the exchange offer and consent solicitation, to accomplish a prearranged concurso mercantil,” it says. Vitro also is extending the deadline of the bond portion of its debt exchange offer to December 21. The cash portion of the offer has expired, with holders of $30m having accepted, and a $575 per $1,000 principal clearing price established. In the note exchange portion, which is still open, Vitro is offering – for each $1,000 principal – $562 in new 8.000% of 2019 bonds, $66 in 10.500% of 2015 mandatorily convertible debentures, and a cash payment equal to accrued interest. An additional cash payment would come from any funds left in a trust used for a cash buyback that remains after the repurchase is complete. Vitro said at the time of launch that creditors could expect a 68%-73% recovery. Rothschild is Vitro’s financial advisor on the process. A bondholder group calling itself the Ad Hoc Group of Vitro Noteholders claims to represent holders of $650m in the Mexican glassmaker’s bonds and opposes the offer.
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Braskem Names Fadigas CEO
Carlos Fadigas has been approved as CEO of Braskem by the petrochemical company’s board, it says. He replaces Bernardo Gradin, who announced last month he planned to step down. Fadigas had been head of Braskem America, as Sunoco Chemicals was renamed following a $350m acquisition by Braskem in February. He was instrumental in negotiating the acquisition as CFO, the post he had held from 2006 until taking over Braskem America.
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Gruma CEO Exits
Juan Fernando Roche, CEO and president of Gruma, has resigned, the Mexican tortilla maker says. CFO Joel Suarez will replace Roche, who had been in the role since January 2006. Roche is leaving for personal reasons, Gruma says.