Members of the Klein family plan to sell 53.78m shares of Brazilian retailer Via Varejo in a public offering, Via Varejo says. The transaction would raise BRL1.35bn ($669m) at Monday’s BRL25.00 closing price, and represents about 16% of the company. Bradesco has been hired to manage, with another bank remaining to be selected. The Kleins own 47% of Via Varejo, which runs the Casas Bahia and Ponto Frio stores.
Category: Equity
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Pension funds grapple with investment limits as portfolios swell
A rise in Brazil’s equity markets could force pension funds nearing their portfolio limits to dump stocks, the chief investment officer of Latin America’s largest pension fund has said.
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Cementos Argos Prices at Low End
Colombia’s Cementos Argos has priced an equity follow-on at the bottom of the range and is expected to raise COP1.648trn ($901m), less than the COP2trn-plus it was targeting. The cement company is selling 214m preferred shares at COP7,700 each, it says in a filing, versus the COP7,700-COP9,300 range set last month. The share total includes 154.7m shares sold to domestic buyers, 27.3m sold to international buyers in the form of ADRs, and another 32m that Argos expects to allocate during a second round. The issuer was authorized to sell up to 250m. The deal was said to receive about 1.5x demand 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 price is reasonable, assuming that the use of proceeds produces a return in line with the past. The biggest question is that there isn’t much information about the use of proceeds,” says an equity analyst following the sale. Argos says it plans to use 20% of the funds raised to repay debt, and the remainder for growth, with both organic and expansion and acquisitions possible. How a large acquisition might fit in and perform to match the strong return profile Cementos Argos has enjoyed was the main concern for investors. The case for investment is supported by the company’s track record and Colombia’s massive infrastructure needs. The issuer elected to set a price range for the transaction due to the common shares’ lower liquidity, according to people following the deal. Bancolombia, JPMorgan and HSBC managed the sale, with Bank of America Merrill Lynch, Credit Suisse and Itau as bookrunners. Argos common shares closed at COP8,240 Thursday. The deal was the first equity sale of the year from a Colombian issuer. Attention now turns to Brazil’s Votorantim Cimentos and an IPO expected to launch as soon as this month and raise more than $5bn.
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Cementos Argos Closes Books
Colombia’s Cementos Argos closed books Wednesday on an equity follow-on targeting more than COP2.0trn ($1.09bn), with pricing expected today. Books were heard to be more than covered Wednesday, according to people following the sale. The cement producer is offering up to 250m preferred shares at COP7,700-COP9,300 each, which would mean a COP2.125trn deal at the COP8,500 midpoint. The sale includes Colombian and international offers. The issuer elected to set a price range for the transaction, due to the shares’ lower liquidity, according to people following the deal – though they note the shares are not as illiquid as other LatAm follow-ons in the recent past that have elected to set a range. Parent Grupo Argos has indicated it will not exercise its rights in the offer. Argos 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 are global coordinators, with Bank of America Merrill Lynch, Credit Suisse and Itau as bookrunners.
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Iguatemi Sets FO timing
Brazilian shopping mall operator Iguatemi is aiming for a June 4 pricing for a BRL470m ($235m) follow-on, according to regulatory documents. The issuer is scheduled to begin meeting investors May 14. It plans to sell 16m primary shares, meaning the transaction would raise BRL470m at Wednesday’s BRL25.52 closing price if a 15% greenshoe is included. 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. In February, Iguatemi raised BRL450m in the domestic bond market. It will hope to follow in the wake of peer Multiplan, which priced a well-received BRL705m follow-on in March.
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Itausa to Add Equity
Itausa has approved a BRL897m ($446m) capital increase, it says. The holding vehicle for Brazilian bank Itau and other businesses is to issue 53m ordinary shares and 85m preferred shares, at BRL6.50 each, to existing holders. Itausa plans to use proceeds to add to its working capital and keep a strong liquidity level.
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Brazilian Rolls Out Mall RE Fund
Brazilian real estate investment firm RB Capital is preparing a BRL122m ($61m) shopping center-focused real-estate fund, according to regulatory documents. The RB Capital 5R Shopping Centers Fundo de Investimento Imobiliario (FII) fund is to consist of the Shopping Praca Taquaral, located in the state of Sao Paulo and operated by the firm 5R. The timing of the transaction is unclear. RB Capital is managing the placement itself.
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CMPC Sets Rights Offer Price
CMPC has set the price for a capital raise of up to CLP230.88bn ($491m), it says. The Chilean pulp producer is planning to offer up to 156m shares to existing holders at CLP1,480 each, in an process open May 9 to June 8. The prices compares to Friday’s CLP1,769 close. Holders may receive one share per 14.26 shares held. CMPC is raising funds to help with the $2.1bn expansion of its Guaiba plant in Brazil. It is also on the road through Monday meeting fixed income investors, and could elect to issue bonds under a $500m authorization. It has also indicated that it could look to raise another $250m in new equity later this year.
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CMPC Lays out Rights Offering Terms
Chile’s CMPC has laid out terms for an equity rights offering, the first part of a fundraising process that could see the pulp producer raise $1.25bn in debt and equity this year. It is seeking to raise about $500m through the issue of 155m new shares to existing holders, at one share per 14.26 shares held. The process will be open May 9 to June 8 and would raise CLP271.25bn ($575m) at Thursday’s CLP1,750 closing price. CMPC is raising funds to help with the $2.1bn expansion of its Guaiba plant in Brazil. It is also on the road through Monday meeting fixed income investors, and could elect to issue bonds under a $500m authorization. It has also indicated that it could look to raise another $250m in new equity later this year.
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Uruguayan Advances IPO
Union Agriculture Group (UAG) planned to list its shares as soon as today, ahead of an IPO that is expected in 2-3 months. The farmland developer is undergoing the listing now for tax and regulatory reasons, according to people familiar with the matter, and has begun informal negotiations with investors and could see a roadshow in about two months, followed by pricing. The transaction is expected to raise at least $50m, by selling up to 2bn shares to the country’s pension funds and up to 200m shares to retail investors. It would be the country’s first IPO since 2006. UAG is raising funds for further land acquisitions, of about 35,000 hectares. There are no bookrunners attached to the deal. UAG targeted $200m in its abandoned 2011 SEC-registered IPO, led by JPMorgan and Credit Suisse. It has since raised more than $100m in equity capital through private transactions. A US-registered deal is not off the table and could be pursued later this year after the Montevideo sale, according to a person with knowledge of the matter. NZ Farming Systems Uruguay raised $82m-equivalent in a 2006 IPO, the last local Uruguayan deal, according to Dealogic data.