Brazil’s GP Investimentos has raised BRL399m ($181m) from a block trade sale of shares in for-profit educator Estacio, according to people familiar with the matter. The private equity shop sold 22.7m shares at BRL17.61 each, representing a 2.2% discount to Wednesday’s closing price. The shares closed at BRL17.30 Thursday. Credit Suisse managed the transaction.
Category: Equity
Posted inDaily Brief
GS Grows OSX Position
Goldman Sachs has acquired shares of OSX and reached a 5.22% stake in the Eike Batista-controlled shipbuilder, OSX says. The Goldman Sachs International entity bought an undisclosed amount of shares September 3. The move comes as OSX shares have lost more than 90% this year, with the company facing the uncertainty of the survival of its main client, fellow EBX company OGX. Holders of more than half of OSX’s bonds have organized and hired Bingham McCutchen to advise, as they prepare for a possible restructuring.
Posted inDaily Brief
Invepar IPO Awaits Window: OAS
Brazilian concession operator Invepar is still planning to hold an IPO, once market conditions get better, Nathaniel Wendling, director of corporate finance at parent OAS, says. “The IPO process should be in full force anytime in the next six months or so. We are just waiting for the market window to reopen,” the official says, speaking on a panel at the LatinFinance Latin America Korea Investors Forum in Seoul last week. Banks have been hired, but he would not disclose them. IPOs for other OAS divisions, in real estate, sports arenas and sanitation could also be possible in the long-term. Each is in a different stage of maturity, but could be a candidate to come to the market during the next several years, as they gain more scale. At the moment a handful of Brazilian issuers have documents ready for deals, but conditions remain tricky. Currency appreciation and other macroeconomic factors are challenging, Wendling says, but deals should be examined on a case-by-case basis. “If you look for stories that have a consistent track record and clear growth strategy, these are the names that will be first out of the box when the market reopens,” he says.
Posted inDaily Brief
International Buyers Drive Volaris IPO
Nearly 79% of Volaris’ $398m IPO is being sold to international investors in the form of ADS, according to regulatory documents, slightly more than the 75% anticipated. The sale priced Tuesday night ahead of Wednesday’s FOMC commentary and came at the bottom of a $12-$14 per ADS range. Demand reached about 3x by the time books closed, according to people familiar with the transaction. Participation included about 56% long-only investors, with LatAm-dedicated and global airline investors playing an important role in the international portion. Afores were the largest investor type in the Mexican portion, followed by institutions and retail. Overall, about 70% of the buyers came from the US, 17% from Mexico, 10% from Europe, and the remainder from other regions. The deal represents 173.2m primary and 115.4m secondary shares, not including a 15% greenshoe, and priced at MXP15.51 ($1.20) per share, or $12.00 per ADS. Each ADS represents 10 shares. Volaris plans to use proceeds for general corporate purposes and to repay loan debt. Deutsche Bank, Morgan Stanley, UBS, Evercore and Santander managed the transaction, joined by Barclays and Cowen on the international portion. Volaris is the first Mexican company to IPO on the NYSE in 2013. The shares were up Wednesday, closing at MXP17.88. The completion of the transaction, plus the good news from the FOMC, could encourage others in the pipeline, which included follow-ons from Avianca-Taca and Latam. The picture remains unclear for IPOs, with Brazil’s Ouro Verde is heard adding itself to the list of those choosing wait.
Posted inDaily Brief
Gener Seeks Equity Capital
AES Gener is preparing to raise $450m in new equity, it says. The matter will be approved at a shareholders’ meeting October 3. The Chilean generator expected to use proceeds to finance projects, such as the Alto Maipo hydroelectric plant and the Cochrane coal plant project.
Posted inDaily Brief
Volaris Lands IPO at Bottom of the Range
Mexico’s Volaris should raise almost $400m from its IPO after pricing Tuesday night at the bottom of the range. The demand was said to reach more than 1x Tuesday afternoon. The issuer priced its ADS, representing 10 common shares, at $12.00 each, suggesting a $398m size if a 15% greenshoe is used. Volaris was to sell the equivalent of 173.1m primary shares and 115.3m secondary shares, not counting the greenshoe, with about 75% expected to be sold in an international tranche in the form of ADS and 25% in Mexico. The exact breakdown was not immediately available Tuesday night. Though coming at the smaller end of expectations, the deal is completed against an uncertain global market backdrop, at a time when investors are particularly skeptical of airlines. “The market is not great for airlines at this time. Oil prices are very volatile,” says Bianca Faiwichow, an analyst at GBM. A growing middle class and rising incomes offer the potential for increased demand for air travel in Mexico, she says. However, the low-cost business model has not yet proven to be as strong as in the US, as it is more vulnerable to changes in the economies in markets such as Mexico and Brazil. Volaris plans to use proceeds for general corporate purposes and to repay loan debt. Deutsche Bank, Morgan Stanley, UBS, Evercore and Santander managed the transaction, joined by Barclays and Cowen on the international portion. It remains to be seen if Colombia’s Avianca-Taca and Chile’s Latam is encouraged enough to move ahead with follow-on plans, and if the group of Brazilian IPOs in the pipeline chose to launch in the September-October window.
Posted inDaily Brief
Avianca Sounds Out Investors
Avianca-Taca is heard holding pre-education meetings this week with equity investors, ahead of a possible follow-on sale of ADR. Citi and JPMorgan are managing. The Colombian airline has said it is studying the possibility of an ADR offering, “depending on conditions in the international markets.” Mexico’s Volaris, scheduled to raise more than MXP5bn ($386m) in an IPO pricing Wednesday, should provide an indication of investor appetite for airline equity. Chile’s Latam has also been authorized for a follow-on. Brazil’s Azul put off an IPO earlier this year.
Posted inDaily Brief
SMU Lowers Equity Sights
Chile’s SMU has approved a $251m equity capital raise, it says, an amount lower than the $300m it originally had in mind. The retailer is raising funds and selling assets to shore up finances, after it revealed in July reporting errors that showed it had breached debt covenants. SMU bondholders agreed last month to grant a waiver for the covenants, in exchange for a fee equivalent to 1.0% of the face value of their debt. SMU has also agreed to take out a subordinated credit for $300m before the end of the year and is discussing the sale of $300m-$400m in non-core assets.
Posted inDaily Brief
CCU Sets FO Price
Compania Cervecerias Unidas (CCU) has concluded the first step in an equity follow-on that should raise CLP331.5bn ($655m), setting the price at CLP6,500, according to regulatory documents. The Chilean beverage company has sold 22.6m shares, representing rights to shares waived by controller IRSA, and now opens a 30-day preferential rights period for existing holders to buy the remaining 28.4m shares. The price represented a 3.0% discount to the previous CLP6,702.60 closing price. Shares closed at CLP6,667.00 Friday. Demand reached CLP645bn from 515 accounts. About 38% of the shares was allocated to international buyers in the form of ADR, 37% to Chilean pension funds, and the remainder to other types of investors. IRSA, owned equally by Heineken and the Luksic family’s Quinenco vehicle, are expected to control 60% of the company post-float, with the market holding the rest. CCU is raising funds for organic growth and acquisitions. JPMorgan, Citi, Deutsche Bank, and Goldman Sachs are managing the international portion, and BanChile and LarrainVial are handling the local portion. CCU in a June meeting agreed to a capital increase of up to CLP340bn.
Posted inDaily Brief
Bolsa Readies for Next Hotel Operator
Grupo Hotelera Santa Fe plans to become the latest Mexican hotel operator to hold an IPO, according to offering documents. The size and timing remain to be set for the deal that features primary as well as secondary shares sold by existing shareholders. Developer Grupo Chartwell and private equity funds Walton Street and Nexxus are the main owners. Santa Fe is raising funds to repay debt and for expansion. Barclays and JPMorgan are managing the international portion, and BBVA and Santander the Mexican portion. Santa Fe operates 10 hotels in 5 Mexican states, including a mix of city and beach resort properties, under brands including Hilton, Hampton Inn, Hyatt and Krystal. The issuer reported MXP1.05bn ($80m) revenue last year. It would follow City Hoteles and the Fibra Inn and Fibra Hotel trusts in going public in the past year. Next up in the Mexican pipeline is the IPO of airline Volaris, scheduled to price Wednesday.