Category: Equity
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GeoPark Looks for Equity to Fund Expansion

by LatinFinance

Chilean-based oil and gas explorer and producer GeoPark is considering an SEC-registered IPO to raise funds for expansion, according to a prospectus. The size and the timing have not been set. GeoPark operates in Chile, Brazil, Colombia and Argentina, and plans to use funds for acquisitions in the first three countries, as well as for organic growth and general corporate purposes. An acquisition in Peru is also a possibility, the company says. The issuer booked $84m in adjusted Ebitda in 1H 2013, up from $70m in 1H 2012, after getting $121m in all of 2012. BTG Pactual, Itau and JPMorgan have been hired to manage. GeoPark hit the bond market in February, raising $300m in 2020 NC4 bonds through the GeoPark Latin America unit.

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Batista to Fight OGX Put

by LatinFinance

Fitch downgraded OGX Monday after controller Eike Batista challenged the $1bn put option exercised by the firm last week. Though it was unclear if the billionaire was able or willing to fund the put option exercised by the cash-strapped oil company last week, markets had taken the news positively. Batista said Monday he would legally challenge the option within 60 days. “I note my rights under the contract and under the law to question the circumstances, the form, the content, the validity and other legal aspects of the planned exercise of the option,” Batista writes. He was to pay $100m immediately and the remainder as needed. Batista’s wealth is now estimated to be less than $1bn. Fitch lowered OGX to C, from CCC, to “reflect the company’s imminent default given its extremely tight liquidity position, and the need for significant capital expenditures to increase production output and operating cash flow.” The agency says OGX had BRL722m ($317m) cash in June, and will run out by the end of the year. OGX 2018 bonds traded at 18%-20% of par Monday, according to a trader. A group of at least six OGX bondholders representing more than half the $3.6bn outstanding in 2018 and 2022 bonds has hired Cleary Gottlieb, Pinheiro Neto and Rothschild to advise. Blackstone is advising OGX. No formal restructuring offer has been announced. Analysts have suggested a bondholder haircut would be necessary, possibly involving creditors receiving equity.

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Surprise OGX Put Not Seen as Solution

by LatinFinance

OGX surprised the markets announcing a plan to exercise a $1bn put option with controller Eike Batista, though it remained unclear to analysts to what extent the put would help the struggling oil company. The move, which Batista had not been expected to afford, calls for $100m immediately, which could buy the borrower time as it stares down a depleted cash pile and a likely restructuring. It remained unclear, however, when OGX would receive the remaining $900m, and whether the exercise is part of negotiations with USD bondholders or a preemptive move to avoid such a restructuring. “If he does put in $1bn, it resolves quite a few issues, and buys them a bit of time – one may even argue that a restructuring is no longer a necessity in the near term,” Revisson Bonfim, executive director of LatAm Corporate Research at Espirito Santo Investment tells LatinFinance. The initial $100m could buy a couple more months, he says, through OGX will still have to address creditors. OGX faces bond interest payments of about $40m in October and $100m in December. Batista could use cash from various asset sales – recently including 11.4% of OGX shares and a controlling stake in the LLX logistics business – for additional contributions, though it is unclear to what extent those proceeds are being used for other commitments within the EBX group. “It is surprising, but I’m not sure much will change in the end. Most likely Batista doesn’t have any money to honor the put,” Omar Zeolla, credit analyst at Oppenheimer Funds, tells LatinFinance. The latest estimates put Batitsa’s wealth at less than $1bn. The put requires Batista to buy shares at BRL6.30 ($2.74) each. The shares closed at BRL0.52 Friday. The bonds were seen trading in the low 20s Friday. A group of at least a half dozen OGX bondholders representing more than half the $3.6bn outstanding in 2018 and 2022 bonds has hired Rothschild, Cleary Gottlieb and Pinheiro Neto to advise. Blackstone is advising OGX. There has been no formal

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Bovespa Challenger Plots Clearinghouse

by LatinFinance

Americas Trading Group (ATG) has joined with risk manager Risk Office to create a new clearinghouse in Brazil, ATG says, a step in ATG’s plan to launch a second Brazilian stock exchange next year. The pair’s joint venture will provide the full range of clearing and settlement services for transactions. The lack of access to such a platform was seen as a potential obstacle to the creation of another exchange. ATG and NYSE Euronext announced plans last year for the exchange, to be called ATS Brasil, and await approval of the CVM regulator. Risk Office and ATG will claim to be in “advanced negotiations” with a third investor to become a partner in the clearinghouse, to be based in Rio de Janeiro.

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Eike Unloads More OGX Shares

by LatinFinance

Eike Batista sold 177.2m shares of OGX Petroleo e Gas Participacoes in the past few days, the oil company says, a piece representing 5.49%. The position would be worth BRL71 ($30m) at Wednesday’s BRL0.40 closing price. It follows Batista’s sale of 1.54% of OGX announced last week. Batista has sold 11.14% of OGX’s stock since March, and intends to hold on to at least 50.01%. The company is running out of cash, and analysts are forecasting a default and likely exchange offer to holders of OGX’s $3.62bn in 2018 and 2022 dollar bonds. A group of at least a half dozen bondholders has hired Rothschild, Cleary Gottlieb and Pinheiro Neto to advise, and awaits a formal offer. Analysts have downgraded OGX bonds, now at Ca/CCC/CCC minus, on the high probability that it will miss interest payments this year.

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Brazilian Educator Files IPO

by LatinFinance

Anima Educacao has officially joined the ranks of Brazilians looking to launch an IPO. The size and timing remain to be set, though an initial filing this week sets it up for a September or October pricing. The sale is to include primary shares, as well as secondary shares sold by a private equity fund linked to BR Investimentos, according to a prospectus. BR Investimentos bought into the company last year and holds a 30.5% stake. Anima is raising funds to expand organically and through acquisitions. Bank of America Merrill Lynch, HSBC and Itau are managing the sale. Anima booked BRL215m ($91m) Ebitda in 1H 2013, up from BRL158m in 1H 2012. Its 2012 full-year Ebitda reached BRL324m, up from BRL254m in 2011. The issuer joins peer Ser Educacional in the Brazilian IPO pipeline, along with vehicle services providers Ouro Verde, Sascar and Unidas.

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Volaris Launches IPO

by LatinFinance

Mexico’s Volaris has launched an IPO targeting MXP5.75bn ($432m) and a September 18 pricing, according to regulatory documents. The airline is offering 173.1m primary shares and 115.4m secondary shares, at MXP16.00-MXP18.67 each, indicating a MXP5.75bn size at the midpoint if a 15% greenshoe is included. The sale includes a Mexican portion, expected to include 72.1m of the shares, and a US ADR portion expected to include the equivalent of 216.4m shares. Proceeds are marked for general corporate purposes and to repay loan debt. Deutsche Bank, Morgan Stanley, UBS, Evercore and Santander are managing, joined by Barclays and Cowen on the international portion.

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