Brazil’s Banco Pine is set to receive as much as BRL156m ($77m) in new equity capital from through a rights offering and the private sale of new shares, it says. The lender’s controllers plan to subscribe 6.6m common shares and 0.5m preferred shares in the rights offering, for a total of BRL100.8m. Germany’s DEG, a minority holder, plans to buy 2.1m preferred shares for BRL30m, on the same terms. Also, French development lender Proparco plans to buy a EUR10m ($12.4m) stake on the same terms as the rights offering. Pine plans to use the proceeds for expanding its operations. Preemptive rights are assured to Pine’s other shareholders.
Category: Equity
Posted inDaily Brief
Santander Aims for Quick Mexico IPO
Santander Mexico plans to file for an IPO as soon as possible in early September, in order to price during the window open in September and October, according to sources following the deal. The bank has previously announced intentions to move ahead with the deal before the end of the year. The growing list of managers includes Santander, Deutsche Bank, UBS, Bank of America Merrill Lynch, Citi, JPMorgan, BBVA and HSBC, according to ECM bankers, who note that roles are still being finalized. The transaction is seen raising more than $2bn to help shore up the Spanish parent’s balance sheet, while creating a float of up to 25% of the Mexican bank.
Posted inDaily Brief
Chilean Builds Equity Debut
Chile’s Echeverria Izquierdo has priced a CLP42.36bn ($87.5m) IPO, the country’s fourth IPO this year and the third within the past month. The construction and engineering firm is selling 151.3m shares at CLP280 each, according to the issuer. The price comes below most analysts expectations and below the pre-set CLP320 minimum, which an issuer is allowed to waive in Chilean equity sales. The deal falls short of a $100m-equivalent target, by about the same margin as other recent IPOs from grower Hortifrut and health insurance provider Inversiones La Construccion missed their expectations. However, optimists point to the ability to get deals done in the local market without a need to rely on foreign investors. About half of the sale went to local institutions, 18% to local retail and the remainder to other local buyers. Total demand reached CLP99.31bn, according to the issuer. With 34 years in operation, the builder is mainly in Chile and Peru, with a small presence in Argentina, and has set up operations this year in Brazil and Colombia. As of December, 49% of its projects were in construction and civil engineering, 44% in industrial construction and 7% in real estate. It began meeting investors in Chile and Peru last month. IMTrust managed the sale, seen as the region’s last public market equity sale before the September-October period.
Posted inDaily Brief
Regulators Say Not so Fast to Enersis Increase
Chilean regulators have found a conflict of interest in Enersis’ planned equity capital raise of up to $8.2bn and have imposed conditions on the operation, according to a regulatory filing. In the transaction announced last week aimed at stremlining holdings int LatAm, shareholders can subscribe with assets rather than cash. Enersis’ parent Endesa was expected to participate with up to $4.86bn in assets, a valuation arrived at by an outside source. Shareholders and analysts have opposed the planned capital increase, saying the Endesa assets are overvalued. The proposed transaction is a deal between two related parties, regulators found, and should be approved by an absolute majority of board members excluding those directors who represent Endesa. Regulators have ordered the electricity company to seek a new valuation of the Endesa assets, and have given the company five working days to inform how it plans to proceed. Enersis had hoped to have a shareholder vote on the process September 13. Enersis may go ahead with the capital increase if it complies with the conditions, and also may appeal against them. Even with Endesa’s 60% stake, Enersis could struggle to get enough minority shareholder votes to reach the two-thirds approval it needs. Enersis plans to use proceeds from the capital increase to fund merger and acquisition opportunities, advance greenfield projects and buy minority interests.
Posted inDaily Brief
Chilean Builder Set for IPO
After closing books Thursday, Chile’s Echeverria Izquierdo is set to emerge with a price today for its IPO expected to raise $100m-equivalent. The construction and engineering firm is planning to sell 151.3m shares, or a 25% stake post-float, to fund concessions, projects and expansion into new markets. “Its new businesses have attractive margins. However, there is execution risk that could mean a reduction in expected earnings,” CorpGroup says in a research report. The shop sees fair value at CLP315 per share, which would suggest a CLP47.66bn ($98m) deal size. CorpGroup also notes an adequate finance structure, low levels of indebtedness, along with a selective diversification of projects. With 34 years in operation, the builder is mainly in Chile and Peru, with a small presence in Argentina and has set up operations this year in Brazil and Colombia. As of December, 49% of its projects were in construction and civil engineering, 44% in industrial construction and 7% in real estate. It began meeting investors in Chile and Peru last month. IMTrust is managing the sale, seen as the region’s last equity sale before the September-October period.
Posted inDaily Brief
PineBridge Closes CCD
PineBridge Investments has finalized what will be a MXP2.1bn ($158m) Certificado de Capital de Desarrollo (CCD) transaction in Mexico’s market, according to regulatory documents. The investment firm has raised MXP420m in the first closing of the fund of funds CCD, with the remainder to arrive via future capital calls. The 2022 deal creates a fund targeting private equity, growth fund, private infrastructure and private credit opportunities across sectors in Mexico. The return structure consists of investors’ initial investment plus an 8% preferred return, after which additional proceeds are divided 95% to investors and 5% to the manager. As is common in CCD transactions, PineBridge plans a parallel fund to allow foreign investment alongside the CCD. Finamex managed the sale, structured by its Fimecap unit and Westwood Capital Advisors. In June, AGC Controladora raised an initial MXP553m for a CCD also with a fund of funds structure. Government-backed Corporcaion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, is also preparing a MXP1bn-MXP5bn transaction.
Posted inDaily Brief
Earnings Trends Cloud ECM Issuance Expectations
With earnings season in full swing in Brazil, public companies’ target revisions and below-forecast results have complicated the picture for both equity market performance and new issuance prospects through the rest of the year. “Revisions in Brazil have been among the worst in the region. The 53% rate [of companies beating earnings estimates] is in line with the average, but the expectations were much lower,” Francisco Schumacher, equity strategist at Deutsche Bank, tells LatinFinance. Only 35% beat sales forecasts, down from 49% in the first quarter. His shop has a 64,000 fair-value level on the Bovespa, and is marketweight rating on Brazil. Much of the trend reflects complications in Brazil’s economy, with lower GDP growth forecasts and lingering concerns about consumer credit and government intervention. “It is clear that this will remain a buyer’s market for some time,” says a Sao Paulo-based ECM banker, noting the quarterly results are neutral to negative for the equity markets going forward, depending on the company and sector. Some 30% of Brazilians have reported so far, with Vale and Oi among the bigger names making headlines with disappointing results. Mexico has mostly finished its earnings season, and the results paint a relatively brighter picture for potential public equity deals. “Earnings have been in line with our expectations,” Manuel Jimenez, equity analyst at Banorte-Ixe, tells LatinFinance, highlighting 14.2% Ebitda growth and 5.7% net income growth for the 43 companies his shop tracks. “With the rich valuation that the market has, there could be a window open for new issuance,” he says. Though Brazil has a full pipeline, five IPOs were postponed in July. “Mexico is going to differentiate itself from Brazil, and it will be reflected in the issuance pipeline, but there can be no mistakes,” says a Mexico City ECM banker, meaning transactions will be limited to the strongest. Mexicans including Santander Mexico and Pinfra, and additional issuers i
Posted inDaily Brief
PineBridge Close to CCD
PineBridge Investments is close to completing a transaction of up to MXP800m ($60m) in Mexico’s Certificado de Capital de Desarrollo (CCD) market, according to regulatory documents. The amount represents the CCD fund’s first close, and is heard to be around 20% of the total targeted amount. The 2022 deal is structured as a fund of funds, and will raise funds for private equity investments across sectors in Mexico. The fund is focused on private equity investment, but could also make some private credit investments. Finamex is managing the sale, structured by its Fimecap unit and Westwood Capital Advisors. In June, AGC Controladora raised MXP553m in the first closing of a fund of funds CCD. Government-backed Corporcaion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, is also preparing a MXP1bn-MXP5bn transaction.
Posted inDaily Brief
MPX Plans Share Split
The board of directors of MPX Energia has approved a plan to split the company’s local common shares and GDRs, it says. The Eike Batista-controlled generator will split each share in three. Holders of GDRs will own the equivalent of a common share. The plan still requires shareholder approval.
Posted inDaily Brief
Batista Moves to Delist LLX
Eike Batista is offering to buy up all of the outstanding shares of Brazil’s LLX Logistica, LLX says, aiming to delist the unit and to give minority holder Ontario Teachers Pension Plan (OTPP) a greater stake. He is offering BRL3.13 ($1.54) per share, representing a 25% premium to the BRL2.50 average price from the 20 day period prior to the announcement. Shares closed Monday at BRL2.96. OTPP, LLX’s second-largest holder after Batista, also plans to take part in the buyout of other shareholders, which could top BRL600m, in order to increase its own stake. LLX does not give an indication of the timing of the offer. The stock is down 12.2% this year, and other companies in the EBX family have also been suffering losses. 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.