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.
Category: Equity
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.
Grupo Aval Eyes US Equity Sale
Colombia’s Grupo Aval is planning to sell shares in the US, according to a regulatory filing, in what would be an IPO of its ADS. The owner of banking and pension operations including Banco de Bogota has indicated a $100m size in the documents, though it is not bound to this amount and the eventual deal should be much larger – if its previous plans for a US offer are any indication. JPMorgan and Goldman Sachs have been hired to manage. Each ADS will represent a to-be-determined number of Aval’s preferred shares. The issuer is raising funds to increase capital in its banking subsidiaries, and possibly for general corporate purposes. It been targeting an ADS debut since at least since 2011, when it also filed initial papers for a US listing and was heard considering at least $1bn. Aval has been funding itself in the bond market – raising $1.6bn last year – and agreed in January to buy BBVA’s Horizonte pension operation in Colombia for $530m. Its last visit to the Colombian equity market was a $1.1bn-equivalent sale representing the debut of the group’s preferred shares, done to pave the way for a US sale.
Hoteles City Sets Bolsa Check-in Date
Hoteles City plans to price its IPO June 13 and is targeting $250m, according to regulatory documents. The Mexican operator of hotel chains including City Suites and City Express is planning a sale of 87m primary and 34.5m secondary shares at MXP24.00-MXP29.00 each, indicating a MXP3.22bn ($251m) size at the midpoint. The total assumes a 15% greenshoe. Secondary share sellers include founders and company officials, as well as investors including Wamex, the IFC and the IDB. Proceeds from the primary portion will be used for expansion. Bank of America Merrill Lynch, Citi and Morgan Stanley are managing the sale, joined by Actinver on the domestic tranche. Founded in 2003, City Hoteles claims to have grown at an average of 34% per year since, reaching 71 hotels throughout Mexico at the end of last year, to make it Mexico’s third-largest operator. Following Thursday’s follow-on from Fibra Hotel, City Hoteles is joined by Inbursa, Vesta and OHL Mexico in a growing June-July Mexican equity pipeline.
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
Fibra Hotel Nears ECM Return
Concentradora Fibra Hotelera Mexicana is scheduled to price an equity follow-on today targeting more than MXP4.5bn ($356m). The hotel real estate fund owned by Grupo GDI and known as Fibra Hotel is planning to sell 196m primary shares, according to regulatory documents, what would be a MXP5.03bn deal if done at Wednesday’s MXP25.69 closing price. The total assumes a 15% greenshoe. The issuer is raising proceeds for acquiring and developing additional properties, as well as for general corporate purposes, and both domestic and international tranches are available. BBVA and JPMorgan are global coordinators, joined by Goldman Sachs on the international portion and Evercore and Banorte-Ixe on the domestic piece. Fibra Hotel has been widely expected to hold a follow-on after a successful MXP4.14bn IPO in December. It follows the pattern of Fibra Uno, the trust that was the pioneer of the Fibra real estate fund asset class and has been to the market three times to raise more than MXP34bn. The fund includes 39 operating Mexican hotels and 16 in development, under the Fiesta Inn, One and Camino Real brands, in 22 Mexican states. The sale kicks off a busy June-July period in Mexico’s ECM, with Vesta, OHL Mexico and Inbursa all planning follow-ons and hotel operator City Hoteles preparing an IPO.
Voto Cimentos Aims IPO
Votorantim Cimentos has launched its IPO, targeting BRL8.0bn ($3.8bn), with pricing likely the week of June 17, according to people familiar with the plan. Investor meetings are set to begin in Brazil next week, followed by international visits. The cement business of Brazil’s Votorantim conglomerate is planning to sell 286m primary units and 114m secondary units at BRL16.00-BRL19.00 each, according to a prospectus, indicating a BRL8.05bn sale at the midpoint if a 15% all-primary share greenshoe is included. A 20% hot issue of both primary and secondary shares is also available. The target amount suggested by the pricing guidelines is less than the $5.4bn the issuer had estimated in its initial filings. The deal includes a Brazilian tranche and a US ADS tranche expected to make up at least 10% of the sale. A unit represents one common share and two preferred shares. The secondary shares are to be sold by controller Votorantim Industrial. Votorantim Cimentos plans to use 45% of the primary proceeds for organic expansion and acquisitions, 40% for working capital and 15% for investments to improve existing operations. BTG Pactual, Credit Suisse, Itau, JPMorgan and Morgan Stanley are 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. The issuer has operations on five continents, including business in North Africa, India and China. In LatAm, it has stakes in operations in Argentina, Chile, Bolivia, Uruguay and Peru. It reported Ebitda of BRL3.07bn ($1.55bn) in 2012. The deal will offer another test of appetite for large Brazilian deals, following BB Seguridade’s BRL11.5bn IPO in April. In Colombia earlier this month, Cementos Argos priced a $900m-equivalent deal at the bottom of its range. Up next in the Brazilian pipeline is Iguatemi, scheduled to price a BRL480m follow-on Tuesday.
Batista Details CCX Auction
Eike Batista has detailed plans for the auction to repurchase shares in the CCX coal mining unit, scheduled for July 12, CCX says. The Brazilian billionaire is preparing to delist CCX through the operation, which could reach BRL281m ($138m). He is offering shares of the other publicly-traded EBX companies – OGX, LLX, MMX MPX and OSX – in an exchange valuing the CCX shares at BRL4.31 each. The shares closed at BRL3.92 Tuesday. The company says there are 65m CCX shares in the public float.
CCU Plans Additional Equity Capital
Chilean beverage company Compania Cervecerias Unidas (CCU) is planning to issue new shares in order to fund expansion plans. Regulatory filings indicate a CLP340bn ($691m) target. Shareholders are to vote on the matter June 18. Luksic family-controlled CCU is looking at both organic and inorganic expansion.
Azul Taxis Out IPO
Brazil’s Azul is preparing to raise funds through an IPO, according to regulatory documents. The airline does not indicate size or timing, though a filing this week sets it up for a July pricing. The sale is to include primary shares, with a 15% greenshoe composed of secondary shares sold by existing holders. Shares may be sold internationally in the form of ADR. Azul is raising funds for expansion and to repay debt. Banco do Brasil, Goldman Sachs, Itau, Morgan Stanley and Santander have been hired to manage the sale.