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.
Category: Equity
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.
BNDES Takes Triunfo Position
BNDES has agreed to invest BRL330m ($167m) in infrastructure specialist Triunfo, Triunfo says. The Brazilian development bank’s BNDESpar arm bought 30m shares at BRL11.00 each. The price compares to a BRL12.00 closing level Tuesday.
Chilean Turns to Equity, Local bonds
Chilean financial services company Grupo Security, which agreed in March to acquire insurance company Cruz del Sur for from the Angelini Group, plans to raise equity capital and issue domestic bonds that could total $300m-equivalent, it says. Security plans to issue approximately 368m new shares as part of a shareholder-approved capital raise, which would mean CLP71.76bn ($154m) at Tuesday’s CLP195 closing price. The proceeds will be used to help cover the $300m-equivalent Cruz del Sur purchase, and come under a 500m-share 3-year program with a term of three years. Grupo Security will also use local market debt – a CLP70bn bank credit and up to UF3m ($147m) in domestic bonds with tenors of 20-25 years, as part of the financing. Security acquired a portfolio of insurance, investment and brokerage businesses operating under the Cruz del Sur brand.
Voto Preps Cement IPO
Votorantim Cimentos has put the wheels in motion for an IPO, according to regulatory documents. The size and timing remain to be determined for the sale, which will include both primary and secondary shares. BTG Pactual, Credit Suisse, Itau, JPMorgan and Morgan Stanley are managing the sale, which will raise proceeds to spend on both organic and acquisition-based expansion. The cement unit of the Votorantim conglomerate booked BRL3.07bn ($1.55bn) in Ebita in 2012.
Smiles Launches IPO, Enlists PE Help
Gol’s Smiles mileage loyalty program has launched an IPO, aiming to raise more than BRL1bn ($503m), and has hooked private equity firm General Atlantic for a BRL400m commitment. With pricing scheduled for April 25, the Brazilian airline plans a sale of 44m of the unit’s 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. Smiles was due to begin meeting investors Monday, in what has been a tricky period for Gol, including credit ratings downgrades on expectations of harsh operating conditions. To shore up the sale and reassure potential investors, General Atlantic has agreed to buy BRL400m, Gol says. The agreement is contingent on a nine month lock-up, Smiles hitting the minimum of the price range and the base deal portion of the IPO 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. The business being carved out to become Smiles booked BRL125m ($63m) in Ebitda last year, after getting BRL164m in 2011 and BRL204m in 2010. Credit analysts and investors fret about Gol’s decreasing cash flows while it faces increasing fuel costs, currency depreciation, and rising competition. However, a successful equity raise would be seen as a positive liquidity event, according to credit ratings reports.
Vapores Seeks Additional Equity
Chile’s Compania Sud Americana de Vapores plans to raise $500m in additional equity capital, it says. The Grupo Luksic-controlled shipping company is looking for funds after agreeing to spend $570m on new ships from Samsung for delivery in 2014, and exercising an option to prepay $258m in debt. It will also use a loan of up to $140m with Bladex to prepay the debt. Shareholders will vote on the matter April 29. Vapores shares closed Thursday at CLP46.70 ($0.001)