Union Agriculture Group (UAG) is preparing to raise $50m-$100m through an IPO in Uruguay – what would be the Montevideo Bolsa’s first IPO since 2006. The farmland developer is looking to sell 2.2bn shares it says, in its second IPO attempt after a pulled 2012 US transaction. UAG is raising funds for further land acquisitions, of about 35,000 hectares. Discussions have started with investors, and the issuer expects to price in the next two months, it says, with an indication of price coming closer to the transaction date. There are no bookrunners attached to the deal, according to a company spokesperson. UAG targeted $200m in its abandoned 2011 deal, led by JPMorgan and Credit Suisse. It has since raised more than $100m in equity capital through private transactions. NZ Farming Systems Uruguay raised $82m-equivalent in a 2006 IPO, the last local Uruguayan deal, according to Dealogic data.
Category: Equity
Abril Defines Follow-on
Brazil’s Abril Educacao is expecting to raise BRL618m ($307m) in its equity follow-on in April. The educational company plans to sell 3.1m primary units and 9.9m secondary units, meaning a BRL618m deal at Monday’s BRL47.50 closing price. The totals assume a 15% greenshoe option. The secondary shares are to be sold by members of the controlling Civita family and private equity funds managed by BR Investimentos and Banif. Abril plans to use the primary proceeds to continue making the acquisitions that represent the main focus of the large competitors in a consolidating sector. The pricing date has not been set, but the deal is expected before the end of April, according to those following it. Bank of America Merrill Lynch, BTG Pactual, Bradesco, Credit Suisse and Itau are managing. Abril raised $273m-equivalent in its 2011 IPO.
US RE Investor Plans CCD
After a few experiences as a co-investor in the asset class, private equity real estate investment firm Walton Street Capital is planning its own certificado de capital de desarrollo (CCD) fund, of up to MXP5bn ($405m). The US shop plans a fund investing in a broad array of Mexican real estate assets, potentially including residential, commercial, industrial, retail and even hospital assets, according to a prospectus. The return structure follows the typical format for CCDs – a preferred return, in this case 8.5%, followed by an 80%-20% division of additional proceeds between investors and the manager. Walton expects 16%-20% total returns for investors. Banorte-Ixe and Banamex are managing the transaction, for which the timing is unclear. Walton has been a co-investor in other real estate CCDs in the past two years, including deals from Construtora Planigrupo and Finsa.
BHG Defines FO
Brazil Hospitality Group (BHG) has indicated it plans to sell 21.6m primary shares in its equity follow-on, meaning a BRL452m ($226m) target based on Friday’s BRL20.92 closing price. The total assumes a 15% greenshoe. The tourism-related developer plans to begin meeting investors April 8, ahead of an April 18 pricing, according to a prospectus. 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 are managing.
Enersis Raises $625m from ADS
Enersis has raised $625m from the sale of American Depositary Shares (ADS), it says, as of the close of the ADS subscription portion of its $6bn equity follow-on. The Chilean holdco for LatAm assets of Spain’s Endesa sold 33.5m ADS, equal to 1.68bn shares. The domestic portion runs through Tuesday. In total, Enersis is offering up to 16.44bn shares at CLP173 each, targeting CLP2.84trn ($6.02bn). JPMorgan, BTG Pactual and Bank of America Merrill Lynch are global coordinators on the ADS sale, with Banchile, BBVA, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Larrain Vial, Morgan Stanley and Santander as bookrunners. JPMorgan, Celfin, BBVA, Santander, Larrain Vial, Banchile and BAML are managing the local side. The controversial sale was approved in December, after months of back and forth with regulators and minority investors. Endesa plans to subscribe its portion of the transaction with its LatAm assets that don’t already belong to Enersis, and needed negotiations with Chilean pension funds and multiple outside evaluations to reach agreement on the assets’ value. The process will raise funds for acquisition opportunities and streamline Endesa’s operations in LatAm by placing all of its holdings under Enersis. Enersis shares closed at CLP184.37 Friday.
Multiplus Sets Equity Targets
Brazil’s Multiplus is targeting more than $400m in an equity follow-on it, says. The frequent flyer rewards program of Brazilian airline TAM plans to sell 31m primary shares, meaning a BRL850m ($425m) sale at Friday’s BRL27.42 closing price. The total assumes a 15% greenshoe. A roadshow is set to begin April 1, ahead of a pricing scheduled for April 12. The issuer is raising funds to buy passenger reward assets from TAM. Bank of America, BTG Pactual and JPMorgan are managing.
IEnova IPO Hits Top of the Range
Infraestructura Energetica Nova (IEnova) has priced its IPO at the top of the range, and expected to raise MXP7.41bn ($596m) after getting at least eight times demand, according to people following the transaction. The first-ever IPO in Mexico’s energy sector offered 218m primary shares at MXP34.00, coming against a MXP30.00-MXP34.00 range. The share total includes an expected greenshoe option. The Mexican unit of Sempra Energy is seen as having a strong foothold in the country’s gas distribution and electricity generation sectors, allowing it to benefit from any reforms coming from efforts of the new presidential administration. Investors weighed the strengths against the chance that reform is limited, and uncertainties surrounding the natural gas import picture in North America. “The story of Sempra Mexico is not the Costa Azul LNG [import terminal] project. The story is the distribution assets and larger pipelines. They are in a plum position to bid and self-build because they have a significant presence in the country,” Mark Barnett, equity analyst at Morningstar, tells LatinFinance. Power generation, industrial use and a growing economy mean a burgeoning demand for natural gas in Mexico going forward, he adds. It is an attractive moment for Sempra to raise equity capital in Mexico, with projects under its belt and more concessions likely available ahead in a liberalizing market, he says. IEnova is raising funds for general corporate purposes, investments and expansion, with about 85% going to the gas business and 15% to electricity. The issuer has about $1.35bn in project needs, including a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora. Citi, Credit Suisse and Deutsche Bank managed the local and international portions, joined by BBVA Bancomer on the domestic tranche. IEnova operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts. The transaction is the l
Sempra Mexico Oversubscribed Ahead of IPO
Infraestructura Energetica Nova (IEnova) is heard with books well oversubscribed ahead of today’s scheduled IPO targeting at least MXP6.54bn ($528m). Investors have demonstrated interest in Mexican deals this year, though a tendency towards pricing at the bottom of the range suggests a disagreement on valuations that has characterized the IPO market in LatAm in the past few years. With IEnova, the Mexican unit of US-based Sempra Energy, buyers see the upside of energy reform initiatives targeted by the new administration of President Enrique Pena Nieto. This is weighed against the specifics of IEnova, notably a that much of the revenue depends on its natural gas business, including the Costa Azul LNG terminal, at a time when the need for importing gas in North America is dropping. “The reforms are a very positive theme in Mexico right now, though the natural gas dynamics are questionable,” says one investor looking at the deal, to be the first IPO in Mexico’s energy sector. Gas accounted for $478m of IEnova’s $608m 2012 revenue, after accounting for $551m in 2011, according to company documents. IEnova plans to sell 218m primary shares at MXP30.00-MXP34.00, according to a prospectus, indicating a MXP6.98bn deal at the midpoint. The total assumes a 15% greenshoe. The issuer is raising funds for general corporate purposes, investments and expansion. IEnova has about $1.35bn in project needs, including a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora. Citi, Credit Suisse and Deutsche Bank are managing the local and international portions, joined by BBVA Bancomer on the domestic tranche. IEnova operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts. The transaction is the last Mexican equity sale in the immediate pipeline, though a stream of Brazilian deals is set to hit the market in April.
Prudential Fibra Lands at Low End
Prudential Real Estate Investors has priced a MXP9.52bn ($765m) IPO for the Terrafina Mexican real estate trust, coming at the bottom of the range. On offer were 340m primary shares pricing at MXP28.00 each, according to people familiar with the sale, versus a MXP28.00-MXP32.00 range. The share total assumes the exercise of a 15% greenshoe option. Though investors continue to express strong interest in the Fibra asset class, the deal’s pricing compares to a Fibra Uno follow-on coming at the top of its range and a Fibra Inn IPO at the midpoint, both earlier this year. The bottom of the range level is in line with the Sanborns and Cultiba IPO’s this year, suggesting investors’ enthusiasm for Mexico but perhaps with some disagreement on valuations. The Terrafina trust will initially contain 132 industrial properties and 14 properties in development throughout Mexico, coming from Prudential’s PLA Industrial I and PLA Industrial II funds. It claims to have the third-largest industrial real estate portfolio in Mexico, and counts La-Z-Boy, Chedraui and Mattel among its tenants. Proceeds from the sale provide funds to repay debt and for working capital. Going forward, Terrafina plans to target acquisitions in the $750m-$1.25bn range. Citi, Goldman Sachs and HSBC managed. The second Fibra IPO of the year brings the total number of Fibras to five, with bankers expecting at least three more Fibra IPOs during 2013. Mexican new ECM issuance continues Thursday, with the scheduled IPO of Sempra Energy’s IEnova.
Chilean Seeks Equity Capital
Chile’s Grupo Security is planning to raise up to CLP100bn ($212m) in new equity capital, it says. The financial services group will put the matter to a shareholder vote April 8. It agreed last week to spend UF6.2m ($300m) to acquire a portfolio of insurance, investment and brokerage businesses operating under the Cruz del Sur Brand from Grupo Angelini.