Category: Equity

Brazilian shopping mall operator Iguatemi is planning to raise more than BRL400m ($198m) through an equity follow-on. The issuer has taken initial steps to register the sale of 16m primary shares, it says, a transaction that would raise BRL442m at Tuesday’s BRL24.00 closing price if a 15% greenshoe is added. Bradesco, BTG Pactual, Credit Suisse and Itau have been hired to manage the sale, for which the timing remains to be determined. 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 last month.

Brazil’s Alupar Investimento has priced a BRL851m ($421m) IPO, clinching enough demand by Monday afternoon to price at the bottom of the range. The holding company for electric transmission and generation operations is selling 40m primary units at BRL18.50 each, according to the CVM, assuming the exercise of a 15% greenshoe. The price comes against a BRL18.50-BRL21.50 range. A unit is made up of one Alupar ordinary share and two preferred shares. Transmission companies appear to be an easier sell among energy assets, though investors say the energy sector is still more challenged to get deals done than the consumer plays pricing later this week. “The rules for transmission have mostly been clarified, and that risk is not much of a concern here. Alupar’s valuation, though, is not as attractive as Taesa,” says a Brazil-based investor looking at the deal, and comparing it to Cemig’s Transmissora Alianca de Energia Eletrica (Taesa). About 87% of Alupar’s revenue comes from transmission operations, consisting of 5,700km of lines in Brazil and Chile. It also operates 179 megawatts of generation capacity and has 484 megawatts under development, through five hydroelectric assets in Brazil and Colombia and one Brazilian wind farm. Alupar is raising funds to be used 80% for obtaining and developing new concessions, and 20% for acquisitions. BTG Pactual, Credit Suisse, Goldman Sachs, Itau and Santander managed the transaction, which the issuer had filed for last year before waiting until 2013 to pull the trigger. Alupar is 93% owned by the Godoy Pereira family, with the remainder held by the FGTS workers’ guarantee fund. Monday’s deal kicks off a busy week for Brazilian ECM. Abril Educacao is scheduled to raise a BRL600m follow-on Wednesday, and BB Seguridade and Smiles are set to follow Thursday with IPOs expected to raise BRL9.49bn and BRL1.03bn, respectively.

Brazil Hospitality Group (BHG) has priced a BRL378m ($187m) equity follow-on, conceding a 3.9% discount in an oversubscribed deal. The demand had been in place heading into Thursday’s pricing, with the only real variable the issuer’s satisfaction with the price level it could get amid the recent market volatility, according to people following the sale. The hotel operator is selling 21.6m primary shares, including a 15% greenshoe, at BRL17.50 each, according to the CVM. The price came versus a BRL18.21 close Thursday, with the shares having slipped 14.5% since closing at BRL21.30 March 20. BHG plans to use 80% of the proceeds for hotel acquisitions, 10% for greenfield projects and 10% for improvements to existing hotels and for working capital. BTG Pactual, Bradesco, Espirito Santo, Goldman Sachs and Itau managed the transaction. BHG is controlled by private equity firm GP Investments, and operates 49 hotels throughout Brazil. Next up in the ECM is the IPO of Brazil’s Alupar Monday, which will kick off a week of deals culminating with the IPOs of Smiles and BB Seguridade.

The IPO carve-out of Gol’s Smiles mileage loyalty program has its order books covered heading into pricing next week, according to people following the sale. Though the airline parent has had its share of bad news, investors have expected the Smiles IPO to get done after the announcement that private equity firm General Atlantic would kick in for BRL400m ($198m), or about half the expected base deal. With pricing scheduled for April 25, Smiles plans a sale of 44m primary shares at BRL20.70-BRL25.80 each, according to a prospectus, meaning a BRL1.03bn sale at the midpoint if a 15% greenshoe is included. A 20% hot issue option is also available. General Atlantic’s participation is contingent on a nine month lock-up, Smiles hitting the minimum of the price range and the base deal reaching BRL800m, among other conditions. The proceeds from the IPO will go to funding the purchase of the passenger loyalty assets currently held by Gol’s VRG unit. Banco do Brasil, Bradesco, Credit Suisse, Deutsche Bank, Itau, Morgan Stanley and Santander are managing the sale.

Books on Banco do Brasil’s carve-out of its insurance operations are already covered, according to people following the deal. The bank resumed the IPO of BB Seguridade on Wednesday, after regulators lifted a suspension on the deal. The bank plans to price the deal on April 25, two days later than originally planned. Investors who had already put in bids were allowed to pull their orders this week after the CVM suspended the sale targeting more than BRL9bn ($4.5bn), because of irregularities in the marketing process. The deal has already drawn enough attention to survive this hiccup, investors say. “I don’t think this will have any effect. This kind of thing happens. It’s a good that the CVM is being strict,” says a Sao Paulo investor considering the deal. The bank is selling 500m secondary shares at BRL15.00-BRL18.00 each, according to offering documents, indicating a BRL9.49bn deal at the midpoint if a 15% greenshoe is included. A 20% hot issue is also possible. All proceeds will go to Banco do Brasil. Banco do Brasil, BTG Pactual, Bradesco, Citi, Itau and JPMorgan are global coordinators, with Brasil Plural and Banco Votorantim joint bookrunners. The deal could end up being LatAm’s largest IPO since Santander Brasil raised $7.5bn in 2009. Next in the pipeline is the BRL400m-plus follow-on from Brazil Hospitality Group, scheduled to price Thursday. The deal is oversubscribed, according to people following it.

Votorantim Cimentos is advancing its IPO plans, filing a preliminary prospectus with the US Securities and Exchange Commission on Wednesday for the sale. The document shows a $5.4bn maximum proposed offer price. BTG Pactual, Credit Suisse, Itau, JPMorgan and Morgan Stanley are managing sale. The proceeds are to fund organic growth, to diversify the firm’s Brazilian product range, for strategic investments and potentially for acquiring heavy building materials firms. The firm reported Ebitda of BRL3.07bn ($1.55bn) in 2012.

Investors who have already put in bids for Banco do Brasil’s carve-out of its insurance unit can pull their orders, the bank says in a statement to the market after the regulator suspended the deal for 30 days. The company declines to comment on the new timing for the IPO of BB Seguridade. The carve-out was due to be finalized this month and was set to be worth more than BRL9bn ($4.5bn). The regulator, CVM, told the bank to hold the transaction for 30 days from April 12 after finding it used non-approved marketing materials. Banco do Brasil, BTG Pactual, Bradesco, Citi, Itau and JPMorgan are global coordinators, with Brasil Plural and Banco Votorantim joint bookrunners.

Banco do Brasil is expected to announce remedial measures to the market today, after the country’s markets regulator, the CVM, suspended the bank’s insurance carve-out IPO on Monday. The CVM put the sale on hold for 30 days after finding the bank used non-approved marketing materials. The bank plans to raise more than BRL9bn ($4.5bn) with the IPO of the unit known as BB Seguridade. The IPO was due to be priced on April 23. Banco do Brasil, BTG Pactual, Bradesco, Citi, Itau and JPMorgan are global coordinators, with Brasil Plural and Banco Votorantim joint bookrunners.