Brazil’s Equatorial Energia plans to begin marketing a $600m-plus equity follow-on November 27, ahead of a December 6 pricing, according to regulatory documents. The energy holdco plans to sell 66m primary shares. This would indicate a BRL1.37bn ($663m) deal, assuming a 15% greenshoe is also used, based on Tuesday’s BRL18.09 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. 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.
Category: Equity
Gol Eyes Mileage IPO
Gol Linhas Aereas is considering an IPO for its Smiles customer loyalty program, according to its quarterly results presentation. A firm decision has not been made, but the Brazilian airline plans to structure Smiles as a separate entity this year, and make a decision on the listing. TAM’s Multiplus program raised $435m in a 2010 IPO.
BTG RE Fund Sets Timing
BTG Pactual plans to price November 29 the follow-on sale of shares in its corporate real estate fund, according to bankers on the deal. The reopening of the Fundo de Investimento Imobiliario (FII) BTG Pactual Corporate Office Fund is offering 6.2m primary quotas – as the shares are known – and 6.9m secondary quotas, in a deal that would raise BRL2.01bn if done at Tuesday’s BRL153.80 closing price. Unlike the initial sale, the fund is marketing to international investors, in what is being billed by the issuer as the first international Brazilian REIT-like offering. BTG, Bank of America Merrill Lynch, Bradesco, Credit Suisse and Santander are managing the transaction. The fund initially raised BRL700m in 2007 and invests in commercial property in Brazil. Brazilians are returning to the equity pipeline, with Minerva expected to price a follow-on November 27, followed by Marfrig on December 4 and Aliansce on December 12.
Marfrig Launches Follow-on
Brazil’s Marfrig has initiated investor meetings ahead of an equity follow-on, targeting BRL1.3bn ($634m). The transaction is expected to price December 4. The meatpacker plans to sell 105m primary shares, which would mean a BRL1.31bn size based on Monday’s BRL10.86 closing price, including a 15% greenshoe. A 20% hot issue is also available. Controller MMS and 13% holder BNDESPar are expected to exercise their 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 are managing the sale.
Sonda Sets Out to Meet Investors
Chile’s Sonda is scheduled to begin today a roadshow for an equity follow-on, targeting a $300m-equivalent raise in early December. The information technology firm has been approved to sell 100m shares to raise funds for a $700m 2013-2015 LatAm expansion plan. This would indicate a CLP146.5bn ($305m) transaction based on Friday’s CLP1,465 closing price. The exact timing has not been set. BTG Pactual and Goldman Sachs are managing the sale, joined by Celfin on the local side. About $200m of Sonda’s expansion plan is to be organic, and $500m should come through acquisitions. It 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. 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. The region’s equity pipeline is filling up for the end of the year, notably with Brazilians, with Brazil’s Fundo de Investimento Imobiliario (FII) BTG Pactual Corporate Office Fund set to lead things off, raising BRL2bn as soon as this week. Follow-ons from fellow Brazilians Minerva and Marfrig will come next. Attempting IPOs are water utility Cedae and Vix Logistica.
YPF Sells Bonds, Petersen Forfeits Shares
Argentina’s state-controlled energy company YPF has raised ARP750m ($157m) through the sale of domestic bonds, it says. The 2017 notes pay Badlar+425bp. It does not name the bookrunners. Separately, Argentina’s Petersen Group has forfeited 5.38% of YPF to Spain’s Repsol, YPF says, as a penalty for failing to make payments on loans. Earlier this year, Repsol accepted 21.2m YPF shares from Argentina’s Petersen Group in lieu of payment for a loan. The Argentine government’s expropriation of a 51% stake in YPF out of Repsol’s 57.4% in May and an adjustment of YPF’s dividend policies left the Petersen Group without means to pay back loans it had taken out in 2008 and 2011 to gain a 25.5% stake in YPF.
Macquarie Enters Fibra Queue
Macquarie is planning to put real estate assets into a fund to be capitalized in Mexico’s Fibra market, according to regulatory documents. Its Macquarie Mexico Real Estate Unit already counts properties in 15 Mexican states, and will use proceeds from the transaction to acquire more. Details on timing and size are not yet available for the deal, which is to include both international and domestic market portions. Bank of America Merrill Lynch, BBVA, JPMorgan and Morgan Stanley are managing the transaction, which is part of a wave of recent deals being prepared in the asset class. Hoteles Prisma and Grupo GDI are both preparing hotel-focused funds. Issuers are spurred on both by a successful follow-on earlier this year from Fibra Uno, still the only completed Fibra, as well as optimism for Mexico’s economic development in the next few years, which will have particular advantages for the real estate sector.
Enersis Lowers Capital Raise Sights
Chile’s Enersis has scaled back plans for a controversial capital increase, and will now target $5.92bn-$6.56bn, it says instead of $8.02bn. Shareholders decide on the plan December 20, with the process to be completed within six months of approval. The utility holdco originally announced the deal in July, but has met stiff resistance from both regulators and minority shareholders. Spain’s Endesa, the controller, had planned to subscribe its share with $4.86bn in LatAm assets it holds outside of Enersis. Authorities found a conflict of interest in the deal, and pension funds balked at the assets’ valuation. After multiple outside appraisals, the assets will now be valued at $3.59bn-$3.97bn. The operation would raise funds mainly for greenfield projects and M&A expansion. 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.
Well-Bid Cemex Sale Tilts toward Internationals
Cemex placed about 85% of the shares sold in the COP2.09trn ($1.15bn) Colombian IPO of the Cemex LatAm unit with international investors and 15% with Colombians, Bolsa y Renta says in a report. The carve-out of the Mexican cement maker’s assets in Colombia, Panama, Costa Rica, Brazil, Guatemala, Nicaragua and El Salvador saw nearly 3x demand. The cement maker priced 170m shares, including a 15% greenshoe, Tuesday at COP12,250 per share, the middle of a COP11,000-13,500 range. The deal was upsized from an initially expected 126m shares. The price implies a EV/2013 Ebitda of 9.5x, Bolsa y Renta says, suggesting 16% upside to the shop’s COP14,250 target price. Both the setting of a price range and the division of shares into local and 144a tranches at the time of pricing are novelties for a Colombian ECM deal, where normally an issuer sets the geographic breakdown as well as a fixed price prior to an extended order period. Cemex LatAm will use the net proceeds to repay debt to Cemex, which will use it for general corporate purposes, including the repayment of existing indebtedness. Bank of America Merrill Lynch, BBVA, Citi and Santander managed the sale, which represents close to a 30% float. The deal comes as part of a plan to sell assets to meet debt payments.
Cemex LatAm Pours at Midpoint
Cemex has priced the IPO of its Cemex LatAm unit at the midpoint of its range, in an upsized deal that should raise more than $1bn-equivalent, according to people familiar with the sale. The Colombia-listed carve-out of the Mexican cement maker’s assets in Colombia, Panama, Costa Rica, Brazil, Guatemala, Nicaragua and El Salvador had a book heard to be at least 2x subscribed Tuesday, in a transaction that also offered a few firsts for a Colombian listing. The base deal was upsized to include 148m shares, from 110m, indicating a COP1.81trn ($999m) size at the COP12,250 per share price, the middle of a COP11,000-13,500 range. A greenshoe was also possible. The number of shares to be placed in Colombia versus internationally had not been disclosed Tuesday night. Both the setting of a price range and the division of shares into local and 144a tranches at the time of pricing are novelties for a Colombian ECM deal, where normally an issuer sets the geographic breakdown as well as a fixed price prior to an extended order period. “This is a positive step for equity transactions in Colombia,” notes a LatAm ECM banker away from the deal. Bankers also note the trend towards carve-outs in LatAm by both regional players and foreigners looking to unlock value from collections of assets. Debt investors’ enthusiasm for the Cemex recovery story appears to have carried over to the equity side, boosted by the carve-out including some of the company’s most attractive assets in high-growth markets. “Central America represents an opportunity for growth, due to the large infrastructure needs,” says a Mexico City-based equity analyst. Colombia accounts for 55% of Cemex LatAm’s sales, and Panama 19%. The base deal represents about a 27% float. Bank of America Merrill Lynch, BBVA, Citi and Santander managed the sale. The deal comes as part of a plan to sell assets to meet debt maturity payments. Cemex in September got creditors to extend to 2017-2018 more than $7.2bn in debt that had been du