Enersis is preparing to launch the initial phase of its $6bn equity capital raise as soon as this week or next, according to sources following the sale. The sale was approved in December, after months of back and forth with regulators and minority investors. The transaction is expected to include an ADR portion sold in the US. The holdco for LatAm assets of Spain’s Endesa indicated it was in discussions with 16 local and international banks regarding the sale, including Bank of America Merrill Lynch, BTG Pactual and JPMorgan, who are heard to have won senior roles. An investor relations official at the company declines to comment on the process. Endesa plans to subscribe its portion of the transaction with its LatAm assets that don’t already belong to Enersis, and needed several months of 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.
Category: Equity
Macquarie Eyes RE Retap
Macquarie’s Mexican real estate trust plans to return to the ECM, its CEO says, as it seeks funds to make additional acquisitions. “The plan is for this Fibra to be diversified, and have assets in office, industrial and retail. These sectors have a good potential for growth during the next 5-10 years,” Jaime Lara, CEO of the Macquarie fund, tells LatinFinance. Acquiring these properties will require a follow-on sale to replenish funds raised in December’s 14.95bn ($1.17bn) IPO, he explains, though the exact size and timing remain to be determined. The fund counts 244 properties, mostly in the industrial space, and is focusing on acquisitions in office and retail space. There is no specific target for the amount to be spent on acquisitions, though Lara notes they are looking at both large portfolio holders and individual property owners to approach. “There is currently a good amount of properties that are in private hands, by small-size and mid-size privately-controlled groups. At some point they will want to recycle capital to raise funds to continue growing,” Lara says of the retail space. The December transaction was LatAm’s largest-ever real estate IPO and drew 68% international participation. Along with Fibra Uno’s $1.7bn January follow-on – with 60% international participation – the deal showcases a new level of investor comfort that should allow the large funds to grow and the asset class to welcome new and more specialized entrants. Fibra Uno is also expected to bring a follow-on, what would be its fourth transaction, within the next 9-12 months.
Brazilian Small Cap Launches IPO
Brazil’s Senior Solution has launched an IPO targeting BRL80m ($41m), according to regulatory documents, and is scheduled to price March 6. The IT provider specializing in the financial industry plans to sell 3.4m primary shares and 2.1m secondary shares, at BRL13.50-BRL15.50 each, implying a BRL80m deal at the midpoint. The total assumes the exercise of a 15% greenshoe. A 20% hot issue is also possible. The selling shareholders in the secondary portion include BNDES and private equity fund Stratus. Senior Solution plans to use 70% of the proceeds for acquisitions, noting that it has about 40 businesses identified as targets. It also plans to use 20% for working capital and 10% for product development. The issuer booked BRL7.3m in Ebitda during the first three quarters of 2012, after taking in BRL5.9m in the full-year 2011 and BRL0.8m in 2010. Banco Votirantim and Banco do Brasil are managing the sale, to be done on the Bovespa Mais small cap index. The issuer will hope to follow in the footsteps of retail-focused IT provider Linx, which built a 20x book for its BRL528m IPO earlier this month.
Bancolombia Wants Additional Equity
Bancolombia plans to issue additional preferred shares, it says, and will put the matter to a vote March 4. There were no additional details immediately available regarding the size of timing of any planned follow-on sale. An investor relations officer did not return a request for comment. In January and February of last year, the bank raised $614m-equivalent in a Colombian domestic equity follow-on, followed by a $300m international tranche. Bancolombia’s preferred shares closed at COP30,000 on Monday.
Maxcom Buyer Launches Tag-Along
Mexican private equity firm Ventura Capital Privado has launched a public tender for up to 56% of the shares of Maxcom, according to a prospectus, in a tag-along offer following its agreement to purchase the troubled Mexican telecom in December. The offer opened Monday and expires March 11. It will spend MXP2.90 ($0.23) per share on up to 250m CPO shares, and the equivalent price for each of up to 50m class A shares. It puts the total maximum cost at MXP764m. Banorte-Ixe is managing the process. As part of the deal agreed in December, Ventura will also buy a minimum of $22m in new shares through an equity capital raise, and Maxcom will hold a tender to exchange for its 11% 2014 bonds, of which there are $200m outstanding. The acquisition is contingent on successful tenders for both the shares and bonds. The CPO shares closed at MXP4.85 on Monday.
Jamaican Bank Pulls ADR Sale
Jamaica’s National Commercial Bank (NCB) has elected not to price the equity sale that would have represented the debut of its ADRs, according to people familiar with the matter, due to insufficient demand. The bank had been looking to raise more than $200m in the sale of 16m ADRs, representing 804m common shares, at $13.00-$15.00 each. NCB was raising funds for general corporate purposes, including organic growth and possible acquisitions. Its common shares closed at JAD19.05 ($0.20) Wednesday. JPMorgan and Macquarie were managing.
QGOG Postpones
Brazil’s Queiroz Galvao Oleo e Gas (QGOG) has postponed its IPO, according to people familiar with the deal. After a well-bid sale from Brazil’s Linx Wednesday night, the SEC-registered debut targeting $600m was heard getting insufficient demand as of late Thursday. There was no immediate indication of if it would attempt another pricing. Though there has been optimism for Brazilian issuers to start the year, the decision is not good news for the Brazilian oil sector, which has not seen a ECM deal in two years. Sentiment towards the sector may have been the deciding factor, rather than valuation. The drill rig operator of the Queiroz Galvao conglomerate had been offering 31.6m primary shares, assuming a 15% greenshoe, at $19.00-$21.00. It was seeking funds to make down payments for two ultra-deepwater drillships, and raise capital for new and existing projects. JPMorgan, Bank of America Merrill Lynch, and Itau were global coordinators, along with Credit Suisse and Bradesco as joint bookrunners and Jefferies, DNB, Banco do Brasil, BNP Paribas and ING as co-managers. The QGOG Constellation unit is 80% controlled by QGOG International Sarl, a vehicle owned by members of the Queiroz Galvao family.
Slim Retailer Clinches $950m IPO
Grupo Sanborns has priced a MXP12.09bn ($950m) IPO, landing near the low end of the price range. Demand for the deal was heard to be about 2x. The retail operation being carved out of Carlos Slim’s Grupo Carso priced 431.7m shares, assuming a 15% greenshoe, at MXP28.00 each, versus a MXP27.00-MXP32.00 range. The sale had to overcome recent concerns about Carlos Slim companies, with crown jewel America Movil seeing possible losses at its Dutch investment KPN. That said, many on the buyside noted that Sanborns represents some of the top assets in Slim’s portfolio, with retailers likely among the biggest beneficiaries if Mexico’s economy lives up to strong forecasts. “This is a strong company and well known, but it may be similar to Cultiba. Valuations are rich in Mexico right now, and investors are very disciplined,” says an ECM banker away from the deal. Pepsi bottler Cultiba priced at the low end of its range last week in a $310m IPO. Sanborns is raising funds for expansion and working capital. It contains the iconic Sanborns stores, as well as other brands including Sears and Saks Fifth Avenue, located almost entirely in Mexico, with locations also in El Salvador and Panama. Inbursa and Credit Suisse were global coordinators, with Citi, Morgan Stanley and Santander serving as bookrunners. The deal was expected to leave Sanborns with an 18% free float, and Carso with 82% ownership. The sale is the last is a busy period for the region’s ECM, with other deals in the pipeline expected to wait for the 4Q financials window.
BNDESPar Adds to Marfrig Stake
Marfrig is set to raise BRL350m ($176m) following the approval of the issuance of convertible shares to BNDESPar. The sale of 43.7m shares at BRL8.00 each comes on the back of December’s BRL1.05bn equity follow-on, and allows the investment arm of the Brazilian development bank to maintain its position in Marfrig. The securities become convertible in 2015. BNDESPar now holds 19.63% of the Brazilian meatpacker. Separately, Marfrig named Frank Ravndal as CEO of its US subsidiary Keystone Foods, it says. He starts in his new role on February 17, taking over for interim CEO William Andersen. Ravndal joins from Cargill, where he was for 17 years, serving in a CEO capacity at several of its businesses.
Linx Starts Brazilian IPO Year at High End
Linx has given the Brazilian IPO market the start it wanted this year, pricing a BRL528m ($265m) deal at the top of its range. In a stark contrast to the trend in 2012, the transaction drew 20x demand, according to people familiar with the terms. The provider of software to the retail sector priced 19.6m shares, assuming a 15% greenshoe, at BRL27.00 each, according to the CVM, versus a BRL23.00-BRL27.00 range. The total includes 6.8m secondary shares sold by a private equity fund linked to Itau. Betting that a retail focus and solid growth story would overcome the usual investor doubts about smaller deals, Linx came to market to raise funds for acquisitions and for working capital. “Investors have liked [larger public Brazilian IT provider] Totvs and its stability. They see this type of company put together with the expected growth in retail and it is an attractive proposition,” says an equity analyst following the sector. Throughout Brazil, retailers are becoming more sophisticated and needing IT services, he explains. New clients appear all the time meaning barriers to entry are low, through once long-term contracts are signed, it becomes harder to switch – favoring players that gain size and scale now and in the next few years. BTG Pactual, Credit Suisse, Itau and Morgan Stanley managed the sale. Linx offers both cloud-based and on-premises products for Brazilian retailers. It has been operating for 27 years and claims 29% market share. Elsewhere, the market awaited late Wednesday the pricing of National Commercial Bank Jamaica’s (NCB) equity follow-on representing the debut of is US ADRs. The bank would raise $224m if it priced at the midpoint of a $13.00-$15.00 range. Today, ECM attention now turns to the week’s heftier transactions, the $1bn IPO of Mexico’s Grupo Sanborns and the $600m SEC-registered IPO of Brazil’s QGOG Constellation.