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.
Category: Equity
Cementos Argos Sets FO Price
Colombia’s Cementos Argos has launched its follow-on equity sale, targeting more than COP1.925trn ($1bn). The cement producer is offering up to 250m preferred shares at COP7,700 to COP9,300 each, it says, meaning a COP2.125trn deal at the COP8,500 midpoint. Books are open through May 8. The sale is to include simultaneous Colombian and international offers. 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 organic and inorganic growth. JPMorgan and HSBC are global coordinators, with Bank of America Merrill Lynch, Credit Suisse and Itau as bookrunners. Common shares closed at COP8,520 Wednesday.
Voto Files with SEC for Cement IPO
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.
BB Opens Exit Door on Seguridade IPO
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.
BB Insurance IPO Put on Ice
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.
Biosev Lands Guaranteed IPO
Brazil’s Biosev priced a BRL814m ($407m) IPO Monday, finding success in its second attempt to debut on the Bovespa thanks to put options that guarantee investors do not lose money in the first year. The Brazilian sugar, ethanol and bioenergy unit of Louis Dreyfus Commodities is selling 53.7m primary shares at BRL15.00 each, according to the CVM, with put options at BRL0.25 each, according to people following the sale. The total assumes the exercise of a 15% greenshoe. The share price had been fixed prior to the sale, with the options priced Monday night versus a BRL0.01-BRL2.00 range. The issuer will take in proceeds of BRL805m, and place the option funds in a separate account. About BRL9m was raised from the option sale, according to the CVM, indicating 37m options were sold. The options are issued by a sister LDC entity and exercisable in July 2014 at BRL16.57. The exercise price represents the BRL15.00 offer price plus the expected appreciation of the DI through July 2014, guaranteeing that investors don’t lose money on the deal in the first 14 months. The inclusion of a put option of this type is a first for the Brazilian equity market, and allowed the issuer to price after pulling its first try in July last year. Biosev plans to spend 70% of the proceeds on expansion, including upgrades, acquisitions and greenfield projects, and the remainder to pay down some BRL200m in USD and BRL-denominated debt due 2014-2024. BTG Pactual, Banco do Brasil, Bradesco, Itau and JPMorgan managed the transaction. The bank lineup added BTG, who replaced Santander and Banco Votorantim from the previous attempt. Biosev pulled the original deal on the night of pricing in July 2012, unable to find demand within its price range. Next up in the Brazilian ECM is Brazil Hospitality Group. It will target a BRL400m-plus follow-on Thursday.
LatAm Equity Funds Gain Inflows
LatAm equity funds received $320m in inflows, while EM equity funds shed $750m, during the week ended April 10, according to Barclays. In terms of performance, LatAm funds rose 2.80% during the week ended April 11, and are up 1.44% year-to-date, according to Lipper. EM funds improved 1.40% during the week, to bring them to a ytd loss of 0.06%. Global small and mid-cap funds were up 2.08% on the week, and have earned 7.94% ytd.
Maxcom Sweetens Terms, Hints at Restructuring
In the hopes of meeting a June coupon payment, Maxcom Telecomunicaciones has improved the terms on its bond tender offer, it says, and extended the deadline to April 24. The 2020 bonds being offered will now pay 7.0% during the first three years, 8.0% during the following two years and 10.0% during the final two years – in place of the previous step-up from 6.0% to 8.0%. The telecom is offering the 2020s in exchange for its outstanding 11.0% 2014 bonds. As of Wednesday, it had received acceptance from holders of 42.13% of the 2014s, and from holders of 44.87% of the Maxcom class A shares for which it is also tendering. The stock tender deadline has similarly been extended to April 24. The offers follow the agreement last year for Mexican private equity firm Ventura Capital Privado to buy Maxcom, at an enterprise value of about $270m. The company says the tender is necessary to make its next interest payment on the 2014s, and that it has hired lawyers to plan for a restructuring in case the tender is unsuccessful.
Cementos Argos Advances
Colombian regulators have approved the sale of up to 250m shares through an equity follow-on from
Cementos Agros, Argos says. A sale of the full authorized amount would raise COP2.20trn ($1.21bn) at Wednesday’s COP8,800 closing price. JPMorgan and HSBC are global coordinators, with Bank of America Merrill Lynch, Credit Suisse and Itau as bookrunners.
Herdez Moves for Nutrisa Shares, Evaluates Refi Options
Grupo Herdez will analyze refinancing options this year as it closes in on the 100% share acquisition of Mexican health and nutrition food company Grupo Nutrisa for as much as MXP2.98bn ($246m), Treasurer Marcel Gay Soto, tells LatinFinance. “We want an equilibrium of bank loans and domestic [bond] market financing at efficient costs and rates,” he says. The size of either transaction, to refinance a 2-year bank loan, remains to be determined. Herdez is considering a 10-year fixed-rate domestic bond transaction and a 5-year loan. Herdez launched Wednesday a public tender for the 33% of Grupo Nutrisa shares it did not buy directly in a January deal, it says. The food products company is offering the same MXP91.00 per share price it paid in January for the remaining shares. It targets 32.7m shares total that would give it 100% ownership. GBM is handling the tender. Nutrisa shares closed at MXP85.00 Thursday.