Spain’s Endesa has set new terms for the controversial equity follow-on it has been preparing for its Enersis unit, resulting in a new CLP2.84trn ($5.96bn) valuation size that pleases Chile’s pensions. The electricity holdco plans to offer 16.44bn shares at CLP173.00 per share, it says. Shares closed at CLP167.26 Friday. The new total is at the low end of the $5.92bn-$6.56bn range Endesa had put out after scaling back from an original $8.02bn. The reduction comes after minority holders, namely the pension funds, objected to the valuation of assets Endesa plans to contribute to Enersis to subscribe its share of the capital increase. Regulators also flagged a conflict of interest. In addition to simplifying Enersis’ complicated structure, Endesa is looking to reduce the gap between its Ebitda and net income, as well as reduce dividend leakage within the Enersis group. The operation could also increase the liquidity of Enersis shares, and give it more cash to continue making acquisitions and developing projects in the region. Shareholders will vote on the new plan December 20. The sale must take place within six months of approval.
Category: Equity
Brazilian Software Specialist Preps IPO
Linx, a Brazilian provider of software to the retail sector, is preparing to go public, according to regulatory documents. The IPO is to include primary shares as well as secondary shares sold by a private equity fund linked to Itau. The size and timing remain to be determined. Linx booked BRL56m ($27m) in Ebitda in 2011, up from BRL40m in 2010. It is seeking to raise funds for acquisitions and for working capital. BTG Pactual, Credit Suisse, Itau and Morgan Stanley have been hired to manage the sale. Linx offers both cloud-based and on-premises products for Brazilian retailers. It has been operating for 27 years and claims 29% of the market share. Other Brazilian IPOs in the pipeline include water utility Cedae, Vix Logistica and AutoBrasil, with all appearing to be waiting for January at the soonest.
CMPC to Visit ECM, DCM
Empresas CMPC plans to sell bonds and raise equity capital in 2013, it says. The need comes after the Chilean pulp and paper company received final board approval to start the $2.1bn expansion of its Guaiba plant in Brazil. It expects to raise $500m in equity capital in the first half of 2013, followed by another $250m at a later point, and will seek shareholders’ approval January 24. It will also look to sell $500m in bonds in the international or local markets. Also, it expects a $1.2bn 10-year loan from BNDES and will look to shed some non-core assets, such as a 7.7% it holds in financial services firm Bicecorp.
Equatorial Due to Price Share Sale
Brazil’s Equatorial Energia was expected to emerge with a price for its equity follow-on by this morning, targeting a transaction of more than $600m. Books were heard to be more than covered Thursday. The energy holdco is offering 66m primary shares. This would indicate a BRL1.28bn ($604m) deal, assuming a 15% greenshoe is used, based on Thursday’s BRL16.80 closing price. A 20% hot issue, comprised of secondary shares owned by controller Vinci Partners, is also possible. About 70% of the proceeds are marked for capitalizing Centrais Eletricas do Para (Celpa), of which Equatorial bought control in September, with the remainder for acquisitions and working capital. The sale should take Equatorial’s free float to 52.6%, up from 24.2%. Bradesco, BTG Pactual, Goldman Sachs and Itau are managing the transaction. Equatorial agreed to buy 61.37% of heavily-indebted Celpa from Grupo Rede for BRL1.00, and is considering teaming up with CPFL Energia to buy all of Rede.
Mexican Pepsi Bottler to Sell Shares
Grupo Embotelladoras Unidas, a Mexican Pepsi bottler that is changing its name to Cultiba, has filed for an equity offering. The issuer plans to sell primary and secondary shares in Mexican and global tranches, and plans to set a price range for the sale, according to regulatory documents, with its outstanding shares seeing low trading levels. The exact size and timing remaining to be set. The issuer plans to sell primary and secondary shares in Mexican and global tranches, according to regulatory documents, with the size and timing remaining to be set. The issuer would need to raise at least $250m-equivalent to repay the bank loans it will take out with the proceeds, and also targets additional capital for investments. The bottler has a $125m loan due 2022 with Rabobank, costing it Libor+225bp, and an MXP1.61bn ($126m) 2022 loan with Banorte at TIIE+160bp. Bank of America Merrill Lynch, Banorte-Ixe, BBVA Bancomer, Credit Suisse, Inbursa and JPMorgan are managing. The company booked $2.17bn-equivalent in Ebitda during the first nine months of 2012. Unidas is in the process of changing its name to Organizacion Cultiba, and will trade under the symbol CULTIBA.
Macquarie Adjusts Fibra Timing
Macquarie’s Mexican real estate operation is scheduled to price a Fibra IPO December 13, according to sources familiar with the sale. The deal targeting more than $1bn had tentatively been scheduled for today. The transaction would raise MXP16.13bn ($1.2bn) if the 598m shares, including a 15% greenshoe, price at the midpoint of a MXP25.00-MXP29.00 range. The deal is aiming for 60% to be sold in an international tranche. Macquarie is planning to put real estate assets into a fund to be capitalized through the REIT-like transaction, and use proceeds to acquire additional properties. The 245 properties in 21 cities in 15 states are to come from CPA Corporate Properties and GE Capital, and are mostly manufacturing-related. Macquarie plans to buy and hold 5% of the Fibra certificates. Bank of America Merrill Lynch, BBVA, BTG Pactual, JPMorgan, Macquarie and Morgan Stanley are managing the transaction, to be the largest in a series of recent deals being done or prepared in the asset class. Concentradora Fibra Hotelera raised $318m-equivalent last week.
Sonda Prices FO
Chile’s Sonda has priced a CLP75.86bn ($158m) equity follow-on, getting just below its floor price, but offering a only minimal discount. The growing regional IT provider sold 53m shares at CLP1,430 each, compared to a CLP1,440 minimum and a 1,471 previous closing price. Competitive demand for the sale topped CLP192bn, with 53% sold internationally. International institutional investors made up the largest block of buyers, accounting for 46.2%, with hedge funds taking 1.6% and other international investors 5.2%. Local pensions bought 17.5%, local non-pension institutions accounted for 20.0%, retail investors 6.0%, and other local buyers 3.5%. Sonda had been authorized to sell 100m shares, and will offer up to 47m more in a preferential period open through early January. It is raising the funds for a $700m 2012-2015 expansion plan. About $200m is to be organic and $500m should come through acquisitions. Sonda is targeting growth outside Chile, specifically in Brazil, Mexico and Colombia. The company would use equity to fund about 40% of the plan, with 40% coming from cash and the remainder from debt. BTG Pactual and Goldman Sachs managed the sale, joined by Celfin on the local side. Sonda shares traded up to close at CLP1,476 Wednesday.
Colombian Builder Launches Follow-on
Colombia’s Conconcreto has launched its equity sale, it says, targeting more than $130m-equivalent and using a discretionary allocation process seen as a novel move for a Colombian follow-on. In contrast to the usual process of setting a fixed price and then taking orders, the infrastructure specialist has indicated a fair value price of COP1,643 ($0.91) per share, and noted that a 12%-18% discount would be appropriate, or COP1,347-COP1,446. Buyers can now submit their bids, be they existing holders looking to exercise preferential rights or new entrants, through December 20. The discount range indicates a COP242.46bn-COP260.28bn ($134m-$144m) total size. Shares closed Tuesday at COP1,300. The 180m shares on offer should represent about 20% of the company post-offering. The proceeds are to be used to fund infrastructure projects. Bancolombia is managing the sale, with Bolsa y Renta and Exponencial joining it as structuring agents. Cemex Latam sued a similar discretionary allocation process in its November IPO. Conconcreto raised COP94.68bn in a December 2010 IPO.
Share Slide Roughs Up Marfrig Sale
Brazil’s Marfrig has priced a BRL1.05bn ($495m) equity follow-on, coming at an 11.6% discount and seeing weak demand after its share price dropped 22% during Monday and Tuesday. The meatpacker is offering 131m shares, including a 15% greenshoe and part of a 20% hot issue, at BRL8.00 each, according to the CVM, versus Tuesday’s BRL9.05 closing price. The sale was heard to be more than 1x subscribed. The sizeable discount comes after shares plummeted 15.5% in Tuesday’s session, following a 7.7% drop Monday. Marfrig had been aiming to raise more than BRL1.2bn. Additionally, the Comissao de Trabalho, Administracao e Servico Publico committee in Brazil’s congress has requested that company officials explain BNDES’s participation in the transaction, specifically its plans to convert fewer than 100%of the convertible debentures it holds, according to local press reports. The development bank owns 14% of Marfrig. “The shares have been falling in anticipation of this offering. It has likely been a difficult sell,” says an equity analyst following the company. He notes high leverage as among the major concerns. Indeed, the sale was done with reducing debt in mind, and was expected to reduce Marfrig’s net debt by 0.7x, from 5.7x Ebitda, according to Barclays. Its debt was downgraded to B1 from B2 in August, due to leverage concerns. BNDESPar, which holds BNDES’ minority stake, and controller MMS and were expected to exercise their full rights in the offering. Marfrig plans to use proceeds to repay debt and to strengthen its capital structure. Bank of America Merrill Lynch, Bradesco, Itau, Banco do Brasil, Deutsche Bank and Santander managed the sale. Peer Minerva fared a bit better last week in a smaller follow-on sale, raising BRL557m. Next up is Chile’s Sonda, releasing pricing this morning after closing books Tuesday on a deal targeting $160m-equivalent. Thursday is scheduled to bring a BRL1.30bn follow-on from Equatorial Energia and a more than $1bn-equivalent IPO of Macqu
Sonda Set for FO
Chile’s Sonda closed books Tuesday and was due to release the price this morning for an equity follow on targeting more than $150m. The information technology firm is selling 53m shares, indicating a CLP77.96bn ($162m) deal at Tuesday’s CLP1,471 closing price. Sonda had been authorized to sell up to 100m shares. The IT company is raising funds for a regional expansion plan, about which analysts are generally optimistic. In a report recommending a buy at CLP1,420, Banco Penta highlights 9% return on investment in the last five years, a rate that the brokerage sees Sonda able to maintain going forward. Bice notes an attractive entry point, with shares trading at 2013 P/E of 17.1x and EV/Ebitda of 8.5x, below historical levels of 22.1x and 10.3x. The specialist in IT, applications and platforms is spending $700m on a 2012-2015 expansion plan. About $200m is to be organic, and $500m should come through acquisitions. Sonda is targeting growth outside Chile, specifically in Brazil, Mexico and Colombia. The company would use equity to fund about 40% of the plan, with 40% coming from cash and the remainder from debt. BTG Pactual and Goldman Sachs managed the sale, joined by Celfin on the local side. Sonda has been a consistent acquirer in the region, most recently taking Brazil’s Euclid for $73m in May and Chilean rival Quintec last year for $61m. It has a presence in Chile, Brazil, Argentina, Colombia, Costa Rica, Ecuador, Mexico and Uruguay.