Peru’s Grana y Montero elected to upsize its equity follow-on, and should raise $474m, according to regulatory documents. The transaction representing the IPO of the Peruvian construction company’s ADS drew multiple times demand, according to people familiar with the terms. In addition to US and European buyers making up the bulk of the sale, Brazilian and Chilean institutions participated, as well as Peruvian pensions. The deal was increased to 19.5m ADS from 16.3m ADS, and the ADS priced at $21.13 each, near the middle of the $19.70-$23.30 price range. The $413m base deal means a total of $474m assuming a 15% greenshoe is exercised. The ADS represent 98m common shares, with the PES11.75 ($4.23) per-share equivalent price representing a 4.1% discount to the previous PES12.25 close. Shares closed Wednesday at PES11.87. The deal benefitted from the overall scarcity of Peruvian equity opportunities, and was the country’s first transaction since InRetail’s $460m IPO in October 2012. Grana y Montero plans to use about 60% of the proceeds for infrastructure projects, 20% for acquisitions, 10% to buy land for its real estate business and 10% for general corporate purposes. BTG Pactual, Credit Suisse, JPMorgan and Morgan Stanley managed the sale, with BBVA, Credicorp and Interbank as co-managers. The sale leaves Grupo Aval, Azul, and Volaris as the LatAm equity deals in the pipeline with SEC registration, as well as Votorantim Cimentos, if that transaction is revived. “You are starting to see more LatAm companies consider the US capital markets,” Alex Ibrahim, head of LatAm at the NYSE, tells LatinFinance. The US JOBS act provisions for foreign companies have helped, he says, as companies are lured by additional pockets of liquidity from US institutions too small to participate in foreign sales directly. Five ECM transactions have had SEC registration this year, according to Dealogic data, following seven last year and 10 in 2011.
Category: Equity
IFC Invests in CCDs
The IFC has invested $50m in a Credit Suisse-run certificado de capital de desarrollo (CCD) fund of funds, the multilateral says. The CS fund was established last year to buy CCDs, Mexican equity certificate offering institutions access to private equity, and has now reached almost $550m in size. The investment follows the IFC participation last week in the IPO of Brazil’s CPFL Energias Renovaveis, buying BRL150m ($68m) of the renewable energy generation developers BRL1.04bn transaction.
Vigor Holders May Go Back to JBS
The controller of Brazil’s Vigor Alimentos plans to conduct a share repurchase offer allowing shareholders to exchange Vigor shares for JBS shares, JBS and Vigor say, effectively reversing the process by which the dairy company was spun off from the Brazilian meatpacker last year. FB Participacoes will offer a one-for-one swap for all of Vigor’s outstanding shares, plus a small premium to account for differences in dividends. In last year’s exchange, JBS shareholders were offered the chance to swap into Vigor shares as a part of the spinoff. However, the process has not resulted in the expected liquidity for Vigor shares. Timing has not been set for the new offer, which received the blessing of minority holder BNDESPar. Vigor pledges to continue with its strategic growth plan, and will fund itself using the Brazilian capital markets in the “short and medium term.” JBS exchanged 118m shares in the process last year, less than the 149.7m it had targeted. The operation was worth about $456m-equivalent, and Bradesco advised JBS.
Mall Fibra Prices at Bottom of Range
Mexican retail property-focused real estate fund Fibra Shop has priced an IPO that should raise MXP5.46bn ($437m), a deal landing at the bottom of its price range. Demand for the transaction, Mexico’s sixth Fibra, was heard at 1.5x-2.0x. The fund is selling 214m primary shares, assuming a 15% greenshoe, and 98m secondary shares at MXP17.50 each, according to people following the sale, versus a MXP17.50-MXP19.50 range. The primary proceeds will go to finance existing loans and real estate acquisitions, and to new purchases. Three property developers, Grupo Cayon, Grupo Aportante Frel and Grupo Central de Arquitectura are the secondary sellers. The trio is putting eight commercial properties into the fund to start. BTG Pactual, Actinver, and Bank of America Merrill Lynch were international leads, with Banorte joining on the local side. Fibra Shop is the sixth Fibra to enter the market. Mexican equity issuers have raised $9.71bn from 14 transactions so far this year, according to Dealogic, already setting a record for volume.
Peruvian Clinches ADS Debut
Peru’s Grana y Montero has set the price for an equity follow-on representing the debut of its US ADS that should raise at least $396m. The Peruvian builder set a PES11.75 per share price late Tuesday, according to people following the sale, which would indicate a PES1.1bn ($396m) transaction at the original 81.4m-share base deal if a 15% greenshoe is included. The shares were to be sold in the form of 16.3m ADS. The level indicates a 4.1% discount to Tuesday’s PES12.25 closing price, and suggests a price per ADS of about $21.10, which would be near the middle of a $19.70-$23.30 price range. The deal benefitted from the overall scarcity of Peruvian equity opportunities, and was the country’s first transaction since InRetail’s $460m IPO in October 2012. “Regional investors are more cautious on Brazilian investment at the moment, but they need places to redeploy their money. They are turning to Colombia, Mexico and Peru,” says an ECM banker on the deal. Grana y Montero plans to use about 60% of the proceeds for infrastructure projects, 20% for acquisitions, 10% to buy land for its real estate business and 10% for general corporate purposes. BTG Pactual, Credit Suisse, JPMorgan and Morgan Stanley managed the sale, with BBVA, Credicorp and Interbank as co-managers. With Mexico’s Fibra Shop also pricing Tuesday, the LatAm ECM new issuance calendar appears to have reached its end until September, with no other deals currently marketing. Following Tuesday’s transactions, issuers from the region will have raised at least $28.80bn from 55 equity deals this year through Tuesday, according to Dealogic data, already surpassing 2012’s $26.41bn full-year volume.
Unidas Rolls Out IPO
Unidas has taken the first official steps for an IPO, according to regulatory documents, and has hired BTG Pactual, JPMorgan, Bank of America Merrill Lynch and Espirito Santo to manage, according to regulatory documents. The size and timing remain to be set for the transaction, but the Brazilian fleet rental and management specialist is likely to target the September-October window after filing this week. The sale is to include both primary shares, as well as secondary shares to be sold by Portuguese automobile group SAG and Brazilian private equity funds Kinea Investimentos, Gavea Investimentos and Vinci Partners. Unidas plans to spend 80% of the primary proceeds on organic growth and strengthening its cash position, and 20% on acquisitions. The issuer reports BRL205m ($92m) in Ebitda in 2012, following BRL170m in 2011 and BRL135m in 2010.
Grana y Montero Ready for US Share Debut
Peru’s Grana y Montero is set to price an equity sale today targeting more than $400m and representing the debut of its ADS shares. The transaction was heard to be oversubscribed as of Monday afternoon. The builder is selling 16.3m ADS, representing 81.4m common shares, at $19.70-$23.30 each in the US market, meaning a $403m sale at the midpoint if a 15% greenshoe is used. About 60% of the proceeds will go to infrastructure projects, 20% for acquisitions, 10% for the purchase of land for its real estate business and 10% for general corporate purposes. BTG Pactual, Credit Suisse, JPMorgan and Morgan Stanley are managing the sale, with BBVA, Credicorp and Interbank as co-managers. It would be the first sizeable equity deal from a Peruvian since InRetail’s $460m IPO in October 2012.
Retail Fibra to Test Asset Class Endurance
Mexican retail property-focused real estate fund Fibra Shop is set to price a MXP5.8bn ($464m) IPO today, in a transaction that will offer an indication of continued investor demand for the Fibra asset class. The deal was heard “comfortably” oversubscribed as of Monday afternoon. The fund is selling 214m primary shares, including a 15% greenshoe option, and 98m secondary shares at MXP17.50-MXP19.50 each, meaning a MXP5.77bn sale at the midpoint. Three property developers, Grupo Cayon, Grupo Aportante Frel and Grupo Central de Arquitectura are the secondary sellers. The trio is putting eight commercial properties into the fund to start. The proceeds raised will go to finance existing loans and real estate acquisitions, and to new purchases. BTG Pactual, Actinver, and Bank of America Merrill Lynch are international leads, with Banorte joining on the local side. “I think we’re getting close to that point where the market may tire of [Fibras]. It may not happen with this transaction, but when you have all of these transactions, valuations can stretch,” says a US-based EM equity portfolio manager who has participated in previous Fibra deals. Fibra shop would be the sixth Fibra to IPO, and the ninth Fibra transaction overall.
CSHG Set to Repoen Logistics FII
Brazil’s Credit Suisse Hedging Griffo is preparing to reopen its CSHG Logistica real estate fund, targeting BRL207m ($92m), according to regulatory documents. The investment shop is expected to reopen this week the fundo de investimento imobiliario (FII) fund that invests in industrial and logistic assets in Brazil. Credit Suisse in managing, along with Ourinvest and Brasil Plural. The deal was originally sold in 2010, raising BRL100m.
Volaris IPO Expects Sept Landing
Mexico’s Volaris is expecting to price its IPO in late September, according to people following the transaction. The amount is still to be determined, with a minimum $100m specified in the initial regulatory documents. The Airline registered its initial documents in June, but like many filing around that time, has apparently elected to wait as market conditions have become more challenging. Brazil’s Azul is another airline in this pack. A few LatAm ECM deals still remain to price in the July window, with Mexico’s Fibra Shop targeting an IPO of about MXP5.8bn ($463m) pricing Tuesday. Peru’s Grana y Montero is also scheduled to price Tuesday a follow-on representing the debut of its US ADS shares, which should raise more than $400m. Volaris also plans an ADS portion, as it raises funds for general corporate purposes and to repay debt. Deutsche Bank, Morgan Stanley, UBS, Evercore and Santander are managing the Volaris sale, joined by Barclays and Cowen on the international portion. Issuers have been encouraged by deals for the likes of Vesta, Inbursa, OMA and Banorte getting done in recent weeks. However those transactions are follow-ons, with the only recent IPO, CPFL Energias Renovaveis, needing a guarantee from lead managers and a commitment from a pension fund to get the deal done, raising BRL1.04bn ($462m). Renovaveis shares lost 3.92% in their first official day of trading Friday to close at BRL12.02.