Manabi, the Brazilian miner which canceled IPO plans this year, has instead turned to private investors for $300m in funding. US-based EIG Global Energy Partners has contributed $150m, with a group of investors including Ontario Teachers Pension Plan taking the remainder, Manabi says. The pre-operational iron ore miner sold 240,000 preferred shares at $1,125 each. An official at the company declines to indicate the size of the equity stake involved. Credit Suisse, Goldman Sachs and Itau have been working with Manabi. The IPO process had never advanced to the point where Manabi indicated the size of the float or how much it planned to raise. The miner was founded last year and is developing the Morro Pilar and Morro Escuro projects in the state of Minas Gerias. OTTP was an initial investor in Manabi prior to Thursday’s investment, along with Korea Investment Corporation and Southeastern Asset Management. Strategic investment from private equity, pension funds, sovereign wealth funds and others should continue to see strong activity from Brazilians cancelling IPOs and still in need of funds, bankers say.
Category: Equity
Cemex Plots Colombia Float
Cemex is aiming to IPO the Cemex Latam unit holding its regional ex-Mexico assets, it says, as part of its broader global asset sale strategy. The subsidiary, holding substantially all of the Mexican cement maker’s assets in Central America and South America, is to list in Colombia, selling shares there and also through an international portion. Cemex does not give details as to the size, but analysts estimate the stake to be foated, likely 25%, could be worth about $750m-$1.0bn, an amount that would help with the amortization payment contemplated under the new debt refinancing agreement Cemex is negotiating with creditors. The move appeared to be taken as additional positive news – following Monday’s announcement of creditor acceptance of a refinancing operation – with both bonds and shares rising. If conditions were not ripe for the sale of shares, undergoing the listing only could be a temporary option, according to sources following the process. “Although the $1.0bn amount the company is paying down does not improve materially its total debt situation, we believe the [debt refinancing and equity sale] bring a credible solution for Cemex’s liquidity situation,” Credit Suisse says in an equity report. CS expects an 8.0x EV/Ebitda multiple for the Latam unit. Cemex announced this week that it had reached 90% acceptance in its offer to holders to push out to 2017-2018 debt due 2014 totaling more than $7bn. It has extended the offer through September 7 in the hopes of getting more than 95%. Cemex bonds were heard up a point Wednesday, and its CPO shares rose 4.19% to MXP10.69.
Developer Plots RE Fund
JHSF Participacoes plans to launch a Fundo de Investimento Imobiliario (FII) in brazil’s domestic market, it says. The developer has started the registration process to raise equity in a vehicle invested in its properties. JHSF declines to provide additional comment. The developer of commercial, retail, and residential properties has previously raised funds in Brazil’s equity and domestic bond markets.
Retailer Gets JPM Investment
JPMorgan Asset Management has agreed to invest $45m in Brazilian online fashion retailer Dafiti, Dafti says. The investor takes a minority stake in the company, with annual revenue in excess of $100m, as it seeks to grow its portfolio and inventory as well as its geographic reach. The 1.5-year-old company, which has about 1,500 employees in LatAm and operates in Brazil, Argentina, Chile, Mexico and Colombia, will look to expand its presence in Mexico, Argentina, Chile and Colombia, and also further develop its delivery systems. European incubator Rocket Internet also holds a significant stake in the company.
Agrenco Seeks Investors
Agrenco, a Brazilian commodities trader in bankruptcy, has initiated the process to seek outside investors, it says. It has hired an advisor to create “data room” for prospective buyers, though it does not name this advisor and was unavailable for comment. “The company believes that, with the entry of a strategic investor and the implementation of operational capacity at its industrial facilities, the value of the company and of its BDRs will increase significantly, it says. An investment of $10m would allow it to ramp-up operations. Its BDR shares closed at BRL0.29 Monday. Agrenco filed for Bankruptcy protection in 2008.
Suzano Holders Convert Bonds
Holders of about BRL1.2bn ($594m) of Suzano’s convertible domestic bonds have converted them into equity, the Brazilian pulp company says. The debentures become 332.9m in shares, bringing the company’s total to 1.11bn outstanding, and a 43% free float. Bonds representing 2.7m shares were sold in 2005, pay TJLP+2.5% and mature in December. Bonds representing 330.3m shares were sold last year, paying ICPA+4.5% and maturing 2013. BNDES held most of the two issuances.
AMX Closes in on Telmex Delisting
America Movil is seeking to complete the process to delist its Telmex unit by offering to buy the remaining 2.79% percent of the fixed-line company’s shares still outstanding, it says. Last year the Carlos Slim-controlled wireless operator bought a large chunk of the outstanding stock last year, and held 97.2% of Telmex as of April. In the latest offer, AMX is offering 10.225 pesos ($0.78) per share, equivalent to last year’s offer after accounting for dividends. Telmex shares, which trade infrequently, closed at MXP10.01 Friday. AMX will ask regulators for permission to do the tender “in the coming days.”
Batista Gets LLX Approval
Brazil’s LLX has received shareholder approval to move ahead with a share buyback and delisting operation, it says. Controller Eike Batista is aiming to buy up the shares he doesn’t own, in an operation that could cost more than BRL620m ($307m), based on a BRL3.13 per share price he proposed. Bank of America Merrill Lynch has been hired to determine the value of the shares. Minority holder Ontario Teachers’ Pension Plan (OTPP) is also to take a greater stake through the operation. LLX does not give an indication of the timing of the offer. LLX closed Friday at BRL3.19. The move towards a strategic partner and away from the public markets is consistent with the trend at EBX, which this year has put off a public listing and sold more than $2bn in private stakes to the Mubadala sovereign wealth fund and to GE.
Miner Cancels IPO Plan
Manabi, a pre-operational Brazilian iron ore miner, has withdrawn its plans to raise funds through an IPO, it says. The company founded last year had filed in May for an all-primary share offer to raise funds to develop its Morro Pilar and Morro Escuro projects in the state of Minas Gerias. The offer was never launched, joining a handful other Brazilian deals which had targeted a pricing in the June-July window. Credit Suisse, Goldman Sachs and Itau were managing the sale.
Endesa Seeks to Win Over Minority
Spain’s Endesa plans to go ahead with an $8.02bn capital increase at its Chilean unit Enersis only if it can gain minority shareholder support, it says. “Endesa wants to make clear it only wants to go through with this operation if there is a broad consensus,” it says. Endesa planned to participate with up to $4.86bn in assets, a valuation arrived at by an outside source. Shareholders, particularly pension funds holding more than 10% of Enersis, and analysts have opposed the planned capital increase, saying the Endesa assets are overvalued. Regulators also found a conflict of interest in the plans, and imposed conditions – including a second valuation of its assets – that Enersis accepted. Enersis plans to use proceeds from the capital increase, designed to streamline Endesa’s holdings in LatAm, to fund merger and acquisition opportunities, advance greenfield projects and buy minority interests.