Brazil’s Embratel is canceling plans to delist shares of its Net Servicos unit, after holders of the tiny sliver of the cable provider Embratel does not own refused the price offered in a tender, Embratel says. Last month, Embratel, controlled by America Movil, offered the shareholders BRL26.64 ($13.18) per share for the 1.8% of net it doesn’t own. Earlier this year, the telecom took control of Net’s holdco, after a purchase of 5.5% of the voting shares for BRL6.44m from Globo put it over the top. Embratel had planned to examine a restructuring of Net following a delisting. S&P has raised Net’s rating to BBB+ from BBB minus, it says, due to the control of America Movil likely providing financial support.
Category: Equity
Posted inDaily Brief
US Developer Eyes CCD
Hines, a Houston-based real estate company, is planning to raise funds in Mexico’s certificado de capital de desarrollo (CCD) market, according to regulatory filings. The transaction, whose target size has not been specified, would create a fund to invest in the development of commercial and residential properties throughout Mexico. The CCD should be 10 years in length, extendable by up to 2 years. The return structure would be similar to other CCDs — principal plus a preferred return, with remaining proceeds divided 70% to investors and 30% to the managers. BBVA and Credit Suisse are managing. Hines has $36bn AUM globally, and has been active in Mexico since 1992. Real estate investment vehicles are expected to boom in the next few years, with investors now having Fibra real-estate income trusts, CCDs and IPOs to choose from. At least three Fibras are in the pipeline, bankers say, following Fibra Uno’s debut for the class. Property developer Vesta is preparing an approximately $300m IPO to price July 18.
Posted inDaily Brief
ECM Volume Down; Brazilians Lead
Overall ECM volume is again disappointing this year, with issuers raising $9.7bn through 37 deals in the first half, down 55% from the corresponding period in 2011 ($21.4 through 48 deals), according to Dealogic. It is the region’s lowest half-year volume since 1H 2009. The BRL1.5bn ($712m) Suzano follow-on last week vaulted BTG Pactual into the lead in the ECM league tables, with $1.15bn in volume from 10 deals, with the bank’s own IPO also having boosted its total back in April. The Brazilian bank is followed by Citi ($1.08bn from 6 transactions) and JPMorgan ($919m from 5). Issuers got off to a late start in 2012, with relatively little volume coming before March. “Nobody was ready in the first quarter. It was a bit frustrating. If the signs of a recovery had come a little earlier in 2011 we would have had more companies ready to tap the market in January and February,” Fabio Nazari, head of ECM at BTG, tells LatinFinance. Follow-on trades, dominant in the first half compared to IPOs, should continue to be responsible for most of the activity in a second half that is difficult to predict. “Given the fact that the market has been quite challenging, advisors are likely to be more honest with issuers about the feasibility of each deal. This brings confidence to those deals that do hit the road. Each one needs to be bulletproof,” he says. In terms of fees, BTG led with $26m in revenue, or 12.7% of the pool, followed by JPMorgan ($24m, 11.5%) and Citi ($16m, 7.7%).
Posted inDaily Brief
Eventual Sigma IPO Likely: Alfa
Grupo Alfa sees an IPO for its Sigma Alimentos food products unit within the next few years, its CFO says. “At some point, when there are more growth projects in our portfolio, not specifically next year, but in the next few years, you could see Sigma coming out to the market,” Ramon Leal tells LatinFinance. New Mexican equity issuers have been hard to come by in recent years, but Alfa has been doing its part. The MXP10.44bn ($794m) IPO of its Alpek petrochemicals unit in April was the country’s first since July 2011. “Companies that are benefitting today from the growth of Mexico, that are mid-sized companies above $1bn, which are many in Mexico, are likely to get financed in the capital markets. I don’t think you will see a rate of issuances similar to Brazil, but you will start to see more companies coming to the market. The diversification of sources of finance will include for many Mexican companies the capital markets and the Bolsa in Mexico,” the official says.
Posted inDaily Brief
Hortifrut Sets IPO Date
Chile’s Hortifrut is scheduled to close books on its approximately $75m IPO July 11, with pricing announced by the following morning, according to a banker managing the sale. The exporter of berries began marketing last month the sale of up to 103.6m primary shares, representing about 29% of the company post-float. In the sale targeting mostly domestic investors, Hortifrut is raising funds for investment in new facilities and export capacity, with an eye on opening new markets in Asia and LatAm. Chilean brokerages Celfin and Penta are managing the sale. Controlled by the Moller family, Hortifrut has growing and distribution operations including LatAm, North America and Europe and is among the world’s largest exporters of blueberries, raspberries, strawberries and blackberries. It posted $22.7m in Ebitda in 2011, up from $13.5m in 2012. While bankers admit the current state of the global markets is challenging for all equity deals, smaller IPOs not depending on international buyers may stand a better chance of completion than larger IPOs.
Posted inDaily Brief
Mexican Developer Kicks Off IPO
Mexico’s Corporacion Inmobiliaria Vesta has launched its IPO, targeting about MXP4bn ($300m), according to regulatory documents. The industrial property developer plans to price July 18. It is offering 177.2m shares at MXP19.00-MXP21.00, meaning a MXP4.08bn sale at the midpoint and if a 15% greenshoe is used. The base deal includes 50.7m primary shares sold in Mexico, 88.6m primary shares sold internationally, and 37.9m secondary shares sold in Mexico by members of the founding Corona family and other investors. Vesta plans to use 75% of the proceeds for construction of new projects and the remainder for acquisitions. Credit Suisse and Santander are managing. The developer is in 11 Mexican states and specializes in light manufacturing and distribution facilities.
Posted inDaily Brief
Taesa Launches Equity Sale
Brazil’s Transmissora Alianca de Energia Eletrica (Taesa) has started the roasdhow for an equity sale of at least BRL1.2bn ($603m), it says, targeting a July 18 pricing. In the transaction, called a “re-IPO” due to the illiquidity of the issuer’s outstanding shares, the Cemig transmission unit plans to sell 20m units at BRL60.00-BRL70.00 each. This would indicate a BRL1.50bn total sale if priced at the midpoint and a 15% greenshoe is exercised. A 20% hot issue is also available. A unit consists of one ordinary and 2 preferred shares. Cemig had planned to improve Taesa’s float and raise funds through the sale since purchasing the Brazilian transmission assets of Italy’s Terna in 2009. The proceeds will be used for investments and expansion. Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander are managing the sale.
Posted inDaily Brief
Fund of Funds CCD Wraps Up First Close
AGC Controladora has raised MXP553m ($42m) from a certificado de capital de desarrollo (CCD) transaction in Mexico’s domestic market, according to regulatory documents. The private equity manager affiliated with US-based Northgate Capital plans to raise up to MXP13bn through a 10-year fund, adding to the initial amount through capital calls. The transaction is being called the first fund of funds in the CCD market, though it will be able to make direct investments in Mexican companies in addition to other PE funds. Regulators’ decision last year to allow capital calls in CCDs ended a debate that had slowed issuance for the 2-year-old asset class. Many were optimistic this would lead to more deals, but market conditions have not cooperated. The ACG fund plans to invest in a variety of sectors, but the return structure varies somewhat from most PE fund-based CCDs. Investors receive their initial investment plus a preferred return equivalent to the Mexican Bolsa’s plus 500bp, before the managers take a 5% cut, with any remaining funds being divided between investors (95%) and managers (5%). Vector managed the transaction. Last month, Corporacion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, filed for a MXP1bn-MXP5bn ($71m-$355m) CCD fund investing alongside CMIC’s FdeF II fund, seeking investments in other funds targeting real estate, infrastructure and other areas.
Posted inDaily Brief
Bioenergy IPO to Test Markets
Brazil’s Louis Dreyfus Commodities has launched an IPO for its Biosev unit, targeting BRL782m-BRL971m ($389m-$483m), according to regulatory documents. The sugar, ethanol and bioenergy unit, also known as LDC Bioenergia, plans to price 41.2m primary shares July 18 at BRL16.50-BRL20.50 each, meaning an BRL877m size if done at the midpoint and a 15% greenshoe is used. A 20% hot issue is also available. Biosev is raising funds for its expansion plan and to repay debt. The issuer has 13 plants in operation, with 40m tons of processing capacity and 1,000 megawatts electric generation capacity, and plans to grow in the areas of sugar and ethanol production and energy generation. Bradesco and JPMorgan are global coordinators on the sale, and Banco do Brasil, Banco Votorantim, Itau and Santander are bookrunners. Starting operations in 2000, the issuer has grown through acquisitions, most recently that of Santelisa Vale in 2009. The Biosev sale is the first Brazilian IPO to launch out of the seven anticipating a July pricing, with others – including Taesa, CPFL Renovaveis and Pague Menos – needing to decide soon if they will test rough conditions. Bankers expect most to postpone.
Posted inMagazine
CORPORATE PERFORMANCE RANKING: Top of the crop
LatinFinance’s first Corporate Performance Ranking highlights the diversity and strength of some of the best companies in the region on equity-based performance