Category: Corporate & Sovereign Strategy
Posted inDaily Brief

Suzano Plots $2bn Expansion

by LatinFinance

Brazilian pulp and paper giant Suzano is planning a $2bn expansion of its cellulose capacity, CEO Antonio Maciel tells LatinFinance. The project, which is likely to be announced in the coming months, should add two new lines of cellulose, Maciel says. Financing for the initiative will be done with cash on hand, suppliers and export credit agencies. The new project, along with Mucuri, which is already underway, will help Suzano boost cellulose production to 1.7m tons by 2009, from 974,000 tons in the last 12 months, says the company.

Posted inDaily Brief

Brazil’s NET Set to Clinch BIGTV Buy

by LatinFinance

NET, the Brazilian pay-TV provider, is close to acquiring BIGTV, a national network with customer bases in several Brazilian cities around the country, CEO Jose Antonio Felix tells LatinFinance. The purchase will cost NET roughly $200m, says the CEO, who adds that the acquisition is part of a plan to grow the customer base. The deal is expected to be sealed by July. NET has annual revenues of BRL3.0bn, while BIGTV’s are BRL100m, according to a December 31 filing. JPMorgan advised NET on the transaction.

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Veteran ABS Banker Resurfaces at PT Bakrie

by LatinFinance

LatAm ABS specialist Michael Lucente has resurfaced in Indonesia three months after quitting Merrill Lynch following a 10-year stint there. He has been appointed CEO at PT Bakrie & Brothers, an Indonesian company with interests ranging from property to telecommunications, reporting to president director Nalinkant Rathod. But that does not mean Lucente, who will continue to be based in New York, is leaving LatAm. “We are very interested in investments in the region,” the banker tells LatinFinance. “Several are under consideration,” he adds. PT Bakrie has holdings with a current market value of more than $6bn. At Merrill, Lucente was responsible for EM structured finance and held various senior positions, most recently MD, principal finance.

Posted inDaily Brief

GISSA Promotes Elizondo

by LatinFinance

Grupo Industrial Saltillo (GISSA) has named Adan Elizondo Elizondo chairman of the board and CEO. He has been a member of GISSA’s board since 1991 and has served on the boards and management teams of several Mexican companies. Ernesto Lopez de Nigris was meanwhile appointed COO of the foundry division, which includes the Cifunsa and Technocast operations. GISSA also names Juan Carlos Lopez Villarreal as COO of the construction division, which includes the ceramic tile, water heaters and housewares operations.

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Brazil Sugar Mill on Track for H2 IPO

by LatinFinance

Brazil’s second largest sugar and ethanol company, SantelisaVale, is readying an IPO it hopes to be ready to launch as early as the second half of this year, CEO Anselmo Rodrigues tells LatinFinance. “We are preparing the company so that when the market reopens, we’ll be ready to go,” says Rodrigues, adding that a transaction could take place in the second half. Through a merger with Vale do Rosario last year, Santelisa shot up to the number two spot in Brazil by crushing capacity, behind only Cosan. Bradesco BBI – which wrote a BRL1.35bn check to Santelisa’s main shareholders days before the Vale do Rosario acquisition was signed – is expected to lead the equity offering. The remaining banks are yet to be decided on, says Rodrigues. Goldman Sachs purchased a 19% stake in Santelisa for BRL400m in July 2007.

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Cracks Appear on LatAm Surface: BCP

by LatinFinance

BCP Securities continues to fret over the US economy, and by default LatAm. “Latin America remains strong, but there are cracks in the veneer,” says the boutique. “Some sectors are starting to show signs of slowdown, as the global situation impinges on consumer confidence,” it adds. BCP says LatAm banks are trimming lending conditions and increasing reserves, but it tips Peru, Mexico and Colombia as investor hot spots. “The economy is on track to grow more than 7% in 2008,” says the shop. “The government is taking concrete measures to improve its rating,” it adds. In Mexico, BCP sees vitality in MXP on the back of strong capital and trade inflows. “Soaring consumption, a pro-business political environment and a rash of economic reforms is inducing international investors to take another look at Mexico,” says BCP. The shop is meanwhile neutral Ecuador and Brazil, and underweight Argentina, Chile and Venezuela. The latter, warns BCP, is “on the path towards destruction.”

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Debt Ratio, Policy Work Needed for Brazil Rate Hike: S&P

by LatinFinance

Brazil will need to see a sharper decline in its debt-to-GDP ratio and improve its fiscal policy in order to move up the ratings ladder after reaching investment grade last week, S&P analysts said in a conference call Friday. “The key to keep moving up the ratings table will be an effort to bring fiscal policy in line with higher-rated countries,” says Lisa Schineller, S&P MD. She sees the ending of the CPMF tax in December as an example of a setback. The decision to raise the Selic 50bp to 11.75%, the first increase in three years, was also key to the timing of the rating action. The move “reinforces the operational independence of the central bank, which is a key underpinning of this rating and an example of a proactive policy move,” she said. S&P also expects the real to depreciate this year due to a widening current account deficit, and a narrowing trade surplus.

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