The board of Chile’s Latam Airlines Group has approved a $1bn capital raise through the issue of 63.5m shares, with proceeds destined for fleet enhancement, financial development, executive compensation is also included as one of the funds’ uses. Separately, S&P has rated the airline at BB, it says. Formed after the merger of Chile’s Lan and Brazil’s Tam in June 2012, the airline is expected to see operating results improve in the coming years, alongside market conditions in Brazil, S&P notes. “Latam’s business risk profile assessment reflects the company’s strong competitive position as the main carrier in Latin America due to its leadership in several domestic markets in the region, capillarity, diversified international routes, and a major cargo business,” says S&P. The outlook is positive.
Category: Equity
OMA Sets ICA Selldown Timing
Mexico’s Grupo Aeroportuario del Centro Norte (OMA) has indicated a June 25 pricing for an all-secondary share equity follow-on that targets more than MXP4.0bn ($313m). In the deal, the Aeroinvest subsidiary of construction company ICA is selling 95m shares, assuming a 15% greenshoe is used. This would raise MXP4.16bn if done at Friday’s MXP43.83 closing price. Aeorinvest holds 42% of OMA, and is expecting to come away from the sale with 18%. OMA expects 57m of the shares to be sold internationally, and 38m in Mexico. Bank of America Merrill Lynch and BBVA are managing the sale, joined by Barclays and Morgan Stanley on the international tranche and Santander on the domestic. ICA is raising funds to combat what ratings agencies have identified as sagging financial metrics. The builder’s cash flow generation has suffered in a weaker construction market.
Volaris Lays out IPO Plans
Mexican low-cost airline Volaris is planning to IPO, in a transaction that will include US ADS, according to regulatory filings. The size and timing have not been determined for the deal, which will include primary shares as well as secondary shares sold by several funds and individuals. The US documents indicate a $100m size, though the sale could end up being larger. Volaris indicated plans to IPO in 2011, and may find conditions this year – a record one so far for Mexican ECM issuance – more acceptable. Filing now sets the airline up for a likely end of June or July sale. Proceeds are marked for general corporate purposes and to repay debt. Volaris booked MXP494m ($39m) Ebitda in 2012, after seeing negative Ebitda of MXP160m in 2011. Deutsche Bank, Morgan Stanley, UBS, Evercore and Santander have been hired to manage, joined by Barclays and Cowen on the international portion. Volaris joins Brazil’s Azul in hoping to IPO before the end of July. Up next in Mexico’s pipeline is an IPO from Hoteles City, pricing June 13 and targeting about $250m.
Cementos Argos Finalizes Share Sale
Cementos Argos has completed the “second round” in the IPO of its preferred shares, allocating an additional COP209.42bn ($111m) to bring the total transaction size to COP1.611trn. The cement producing subsidiary of Grupo Argos sold 27m shares in the second round, it says, out of a possible 32m, at the same COP7,700 per share price that was set last month at the pricing of the first round – the low end of a COP7,700-COP9,300 range. Though both rounds, it sold 133m shares to local investors and 76m to international buyers in the form of ADR, and fell short of a COP2trn-plus target it originally planned. The deal was said to receive about 1.5x demand in the first round and was heard driven by existing shareholders, though Grupo Argos – owner of 60% prior to the sale – chose not to exercise its rights in the offer. The issuer plans to use 20% of the funds raised to repay debt, and the remainder for growth, with both organic and expansion and acquisitions possible. Bancolombia, JPMorgan and HSBC managed the sale, with Bank of America Merrill Lynch, Credit Suisse and Itau as bookrunners. The new preferred shares closed at COP8,150 Wednesday, and the older common shares at COP8,090.
Brazilian Lands Follow-on Funds
Brazil’s Iguatemi has priced a BRL432m ($222m) equity follow-on, coming at a 2.2% discount. The shopping mall operator offered 18.4m primary shares at BRL23.50 each, including a 15% greenshoe, according to the CVM. The price compares to the BRL24.02 closing in Tuesday’s session, during which the share lost 1.9%. Iguatemi expects to spend half the proceeds on greenfield projects, 30% on upgrading existing shopping centers and 20% on acquisitions. Bradesco, BTG Pactual, Credit Suisse and Itau managed the transaction. The deal kicks off Brazil’s contingent of equity issuance in the June-July window, and had been expected to have little problem pricing. A bigger test will be the IPO of Votorantim Cimentos, targeting an BRL8.0bn June 18-20. Debuts from CPFL Renovaveis and Azul and a follow-on from MPX are to follow. Iguatemi brings the region’s ECM volume this year to $19.74bn from 40 deals, according to Dealogic, well ahead of the $8.37bn raised in the corresponding period in 2012.
Grana y Montero Plans US Listing
Peru’s Grana y Montero is preparing to hold an equity follow-on, a deal that will include the debut of ADS shares in the US, according to regulatory documents. The construction company expects to start a roadshow Monday for the approximately $400m transaction planned for the first week of July, corporate investment manager Antonio Rodriguez Canales tells LatinFinance. “We think this is the moment. We find a lot of appetite for issues from Peru and Chile,” he says. 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, according to documents. BTG Pactual, Credit Suisse, JPMorgan and Morgan Stanley are managing. The ADS will represent a to-be-determined number of Grana common shares, which closed Tuesday at PES11.30 ($4.15) each. Rodriguez Canales spoke on the sidelines of the LatinFinance Andean Finance & Investment Forum in Lima Tuesday.
OHL Mexico FO Details Emerge
OHL Mexico is targeting $650m in its planned equity follow-on and expects to price June 20, according to offering documents. It is selling 241.2m primary shares, including a 15% greenshoe, indicating a MXP8.23bn ($648m) deal at Tuesday’s MXP34.11 closing price. The transaction should represent about 13.9% of the unit and result in a 36% free-float. The Mexican unit of Spain’s OHL Concesiones concession operator plans to use about half of the proceeds to make investments in projects and half to repay debt. BBVA and UBS are global coordinators, joined by Goldman Sachs and JPMorgan on the international portion and Santander on the local side. The issuer raised $900m-equivalent in a 2010 IPO.
Iguatemi Set for Equity Funds
Brazilian shopping mall operator Iguatemi is scheduled to hold an equity follow-on today that should raise more than BRL400m ($189m). The issuer plans to sell 16m primary shares, meaning the transaction would raise BRL451m at Monday’s BRL24.48 closing price if a 15% greenshoe is included. The share price has moved very little, up around 2.0%, since announcement in April. Iguatemi expects to spend half the proceeds on greenfield projects, 30% on upgrading existing shopping centers and 20% on acquisitions. Bradesco, BTG Pactual, Credit Suisse and Itau are managing the sale. It will hope to follow in the wake of peer Multiplan, which priced a well-received BRL705m follow-on in March. The deal kicks off Brazil’s contingent of equity issuance in the June-July window, and will be followed by Votorantim Cimentos, targeting an BRL8.0bn IPO June 18-20. Debuts from CPFL Renovaveis and Azul and a follow-on from MPX are to follow.
MPX Initiates Follow-on
Brazil’s MPX is looking to raise at least BRL1.38bn ($645m) through a public equity follow-on, the next planned stage in the process of Germany’s E.ON taking a bigger stake in the generator. The EBX unit is planning to sell 138m primary shares, assuming a 15% greenshoe. The lead managers have guaranteed a minimum BRL10.00 per share price – the same level at which E.ON agreed to buy BRL1.42bn shares in April directly from Batista. At the time it also pledged to buy BRL350m in the follow-on. The pricing date remains to be determined. MPX shares closed at BRL9.36 Friday. The proceeds will be used to reinforce the issuer’s capital structure and invest in new projects. E.ON should retain a 36.2% stake in MPX after the offering, while Batista’s stake will fall to 23.7% from 29.0%. Free floating shares will represent 39.2%. BTG Pactual and Goldman Sachs are managing.
Fibra Hotel Prices Well Bid Follow-on
Concentradora Fibra Hotelera Mexicana has priced an equity follow-on that should raise MXP4.89bn ($382m), getting nearly 6x demand and coming at a 5.6% discount. The hotel real estate fund owned by Grupo GDI and known as Fibra Hotel is selling 196m primary shares, assuming a 15% greenshoe, at MXP24.95 each, according to people familiar with the sale. The price compares to Thursday’s MXP26.44 closing level. The sale was expected to be allocated roughly equally between international and Mexican tranches, and buyers are said to include 10 Mexican Afores and about 50 international funds. “This is still an excellent growth story,” says a US-based equity investor looking at the deal. “The macroeconomic growth in Mexico continues to offer a strong demand for real estate assets and inflows for the Fibras,” Luis Rodriguez, head of research at Finamex, tells LatinFinance. In the case of hotel-focused Fibras the success depends on a continuation of overall economic growth that fosters business travel. He notes a push to allow Fibras into the IPC index, which if successful could improve the attractiveness of the asset class even more going forward. The issuer is raising proceeds for acquiring and developing additional properties, as well as for general corporate purposes. Fibra Hotel should see growth allowing Ebitda to increase by more than 50% in 2013 and again in 2014, Ve por Mas says in a research report, noting a MXP36.50 target price for the end of 2014. BBVA and JPMorgan were global coordinators on the transaction, joined by Goldman Sachs on the international portion and Evercore and Banorte-Ixe on the domestic piece. The fund includes 39 operating Mexican hotels and 16 in development, under the Fiesta Inn, One and Camino Real brands, in 22 Mexican states. Its shares have gained more than 40% since the MXP4.1bn IPO in November. Thursday’s follow-on kicks off a busy June-July period in Mexico’s ECM. Vesta, OHL Mexico and Inbursa are all planning follow-ons, and hotel oper