Enersis plans to continue with its planned $8.02bn capital increase, comply with regulator’s conditions and seek necessary valuations of assets to be put up by parent Endesa in the operation, it says. The Chile-based regional energy company pushed back the shareholder meeting to approve the plan in order to allow for adjustments. It does not give a new date for the meeting, originally scheduled for September 13. Last week, regulators found a conflict of interest in the proposed operation aimed at streamlining Endesa’s holdings in LatAm. Enersis’ parent Endesa was expected 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. Banchile-Citi, for one, found a 29% premium to market price. 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 also ordered the electricity company to seek a new valuation of the Endesa assets. Enersis plans to use proceeds from the capital increase to fund merger and acquisition opportunities, advance greenfield projects and buy minority interests.
Category: Equity
Biosev Cancels Registration
Biosev, the Brazilian sugar and bioengery producer which Louis Dreyfuss commodities had hoped to carve out, has canceled its IPO registration. The move is not a surprise considering the issuer pulled the approximately BRL850m ($420m) IPO on the scheduled pricing date last month, though it had kept open the possibility of another attempt later this year. Biosev cites “economic uncertainties in the Brazilian and international markets in recent months.” The poor demand plaguing most Brazilian issuers this year was blamed for the failure to price in July. Bradesco and JPMorgan were global coordinators on the sale, with Banco do Brasil, Banco Votorantim, Itau and Santander as bookrunners.
Tereos Harvests Brazil Funds
Brazil-based sugar and ethanol producer Tereos Internacional has raised BRL397m ($184m) in a capital increase, Tereos, its French parent, says. The offer, launched in June, priced at BRL2.60 per share and was fully subscribed with 142m shares. Tereos now holds 69.6% of the Brazilian unit. Funds support the development of the company.
BlackRock Takes Gerdau Stake to 5%
Fund manager BlackRock has increased its position in Brazil’s Gerdau to 5.02%, Gerdau says, through the purchase of preferred shares. Blackrock holds 11.8m ADR and 45.8m preferred shares.
PE Group Plots Paraguay E&P Listing
After combining three of its Paraguayan E&P units into a single entity, private equity firm Dahava Group plans to raise as much as $300m through listings on the Asuncion and London stock exchanges, it says. The firm’s local Dahava Petroleos vehicle holds the Aurora Petroleos, Boreal Petroleos and CDS Energy units, which it has bought over the last two years, spending more than $100m, according to a company official. After proving the units’ reserves, it now plans to raise up to $100m on the Paraguayan bolsa, hiring Valores to manage, and up to $200m on London’s AIM market, via Strand Hanson. The group says the oil assets should help make Paraguay energy independent. Dahava also owns two diamond mines and a black jade operation, as well as oil and gas concessions in Southern Africa.
Pine Gets Shareholder Boost
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.
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.
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.
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.
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.