Brazil’s Azul has cancelled registration for an IPO, according to the CVM, as difficult market conditions challenge Brazilian equity issuers who have been counting on a peaceful September. The long-awaited IPO of the Brazilian airline – said to target as much as BRL1bn ($415m) – was to include local and SEC-registered portions. “The market is very difficult at the moment and the company is waiting for a better window,” an investor relations official says. Others in the pipeline could still press ahead, with fleet rental provider Unidas heard meeting investors this week pre-launch. “The environment is challenging and investors are very selective, but that has been the case all year,” says one ECM banker, noting that there are still issuers that want to be in a position to take advantage of any calm in September or October. “There was the expectation that the market would be open in September, but that is not unfolding as we expected,” says another. Particularly unhelpful is the real widening out to close at BRL2.41 per USD Monday. Banco do Brasil, Goldman Sachs, Itau, Morgan Stanley and Santander had been managing the Azul transaction. It is one of four Airlines in the region hoping to issue equity, with Mexico’s Volaris filed for an IPO and Latam Airlines for a follow-on. Avianca has not yet filed, but is considering a follow-on. In Brazil, Unidas and fellow vehicle rental specialist Ouro Verde lead the IPO pipeline. Despite the concerns, ECM volume in the region has been encouraging, at least compared to recent years. Issuers have raised $29.53bn from 59 deals through Monday, according to Dealogic data, already topping last year’s $26.18bn full-year total. Brazilians have accounted for $11.76bn so far in 2013, topping the 2012 full-year total of $9.14bn.
Category: Equity
Vinci Readies Commercial RE Fund
Brazil’s Vinci Partners is preparing a BRL500m ($355m) fundo de investimento imobiliario (FII) real estate fund for sale in the domestic market, according to regulatory documents. The Vinci Renda Imobiliaria fund will target retail, hotel and logistics properties in Sao Paulo, Rio de Janeiro and other large Brazilian cities. The fund may be upsized by as much as BRL175m. The timetable for closing is unclear. Itau is managing the placement.
Celpa Seeks Additional Equity Capital
Brazil’s Centrais Eletricas do Para (Celpa) has approved the raising of BRL2bn ($837m) in new equity capital, according to a regulatory document. The funds will come through the issuing of new ordinary shares. Details including timing and whether or not the capital raise is to include a public sale, remain to be determined. Equatorial Energia purchased the then-indebted Celpa from Grupo Rede last year, and raised fronds to capitalize Celpa through a BRL1.42bn equity follow on.
BCI Targets $400m Capital Raise
Chile’s Banco de Credito e Inversiones (BCI) could look to raise $400m through a capital increase if the plan is approved by shareholders, it says. The Chilean bank will seek their approval to raise funds to help with the acquisition of City National Bank of Florida from Spain’s Bankia agreed in May. The $883m deal is set to close in the first quarter of 2014, pending approvals. The bank also says it would put 10% of the increase toward compensation for workers.
GBM Closes Debt CCD
Grupo Bursatil Mexicano (GBM) has raised MXP1.3bn ($101m) for a certificado de desarrollo de capital (CCD) fund, according to regulatory documents. The 5-year fund is to focus on making investments in debt assets, and expects a return of 6%-8%. The deal is the first in the CCD class to be placed without participation from pension funds, GBM says, instead relying on private banking and “other” institutions. The fund is GBM’s second CCD, following a 10-year infrastructure investment-focused fund launched last year with MXP750m and expected to eventually reach MXP3.75bn. This year’s CCD is to be pre-funded, as opposed to last year’s, which is reaching its target via capital calls. GBM managed the placement of the CCDs.
Investors Roll out Energy CCD
A group of Mexican investors is planning to raise up to MXP7bn ($544m) in a certificado de capital de desarrollo (CCD) fund targeting investment in the country’s energy and infrastructure space, according to regulatory documents. Mexico Infrastructure Partners, a recently created entity headed by former government energy official Mario Budebo, plans a 12-year fund raising MXP1.4bn at first and reaching up to MXP7bn through capital calls. The CCD fund, along with a parallel private equity fund, plans to invest in greenfield and brownfield energy projects, including renewable and non-renewable, as well as infrastructure projects. The fund, known as Fomento a la Energia e Infraestructura de Mexico, has a 5-year investment period. Investors should receive their initial investment plus a 9% preferred return, with remaining proceeds split 80%-20% between investors and the manager. Santander is managing the transaction, for which timing is unclear.
Avianca Adds to Airline Equity Pipeline
Avianca-Taca is considering an equity follow-on, according to people familiar with the plan. Citi, JPMorgan, Bank of America Merrill Lynch and UBS are heard mandated for the transaction. If it moves forward, the Colombian would join other airlines planning to raise funds in the equity markets. Latam Airlines is preparing a follow-on, Mexico’s Volaris has filed for an IPO including an SEC-registered tranche, and Brazil’s Azul has also registered for an IPO. Both are also expected to try to price before the end of the year, if market conditions permit. An investor relations official at Avianca declines to comment, nothing that nothing official has been announced.
GBM Set to Close Debt CCD
Grupo Bursatil Mexicano (GBM) is scheduled to close books today on a certificado de desarollo de capital (CCD) fund that may raise as much as MXP2.0bn ($157m), according to regulatory documents. The 5-year fund is to focus on making investments in debt assets, and expects a return of 6%-8%. The fund is the group’s second CCD, following a 10-year infrastructure investment-focused fund launched last year with MXP750m and expected to eventually reach MXP3.75bn. This year’s CCD is to be pre-funded, as opposed to last year’s, which is reaching its target via capital calls. GBM is managing the placement of the CCDs.
CFR Moves Closer to Share Sale
Chile’s CFR Pharmaceuticals has registered the sale of 3bn shares, working under a $750m-equivalent capital raise authorization. The sale of 3bn shares would fetch CLP333bn ($651m) at Tuesday’s CLP111.00 closing price. The pharmaceuticals specialist is raising funds to help fund a $1.3bn offer it has made for South Africa’s Adcock Ingram. The offer was approved by CFR shareholders this month, and awaits the response from Adcock’s.
Voto Withdraws Cimentos IPO Registration
Brazil’s Votorantim Cimentos has officially requested the cancellation of its IPO registration in the US and Brazil, according to regulatory documents. The industrial conglomerate blames market conditions that make such a sale unlikely in the short term. An IPO remains in the issuer’s medium to long-term plans, ECM bankers say. The cancellation follows the postponement of the transaction days before the scheduled pricing in June. The cement maker was targeting more than BRL8.0bn ($3.49bn) in the sale of 286m primary units and 114m secondary units at BRL16.00-BRL19.00 each. Concern about the US Fed winding down monetary stimulus shook the markets beginning in May, making life difficult for equity issuers, particularly IPOs. BTG Pactual, Credit Suisse, Itau, JPMorgan and Morgan Stanley were the global coordinators on the transaction, with Banco do Brasil, Banco Votorantim, Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and HSBC as bookrunners.