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.
Category: Equity
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EQUITY: Sign of the times
Raising capital through the international and domestic equity markets has proved a tough challenge across Latin America this year. By June 30 some $9.7 billion had been raised — down […]
Fund of Funds CCD Set for First Close
AGC Controladora is set to raise the first cash from a fund of funds certificado de capital de desarollo (CCD) transaction in Mexico’s domestic market. The private equity manager affiliated with US-based Northgate Capital is set to close the first MXP600m ($45m) portion of the fund, according to regulatory documents. It 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 is managing the sale. Earlier this month, Corporcaion 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.
BlackRock Buys Eletropaulo Stake
US asset manager BlackRock has bought a 5.06% stake in Brazil’s Eletropaulo, the power distributor says. The 5.09m shares would be worth BRL125m ($60m) at Wednesday’s BRL24.47 closing price.
Suzano Lands FO on Rough Day
Suzano Papel e Celulose has priced a BRL1.48bn ($712m) follow-on equity sale, coming at a slight discount after seeing shares fall 7.5% Wednesday due to an analyst price estimate cut. The Brazilian pulp and paper producer sold 119.6m common shares and 250.1m preferred shares, at BRL4.00 each, according to the CVM. The all-primary share total assumes the exercise of overallotments totaling 19.9m common shares and 52.2m preferred shares, the maximum allowed according to the sale’s prospectus. The price represents a 1.72% discount from Wednesday’s BRL4.07 preferred share closing price, with the stock dropping 7.5% during the session, on a day when the Bovespa shed 1.35%. Barclays cut Suzano’s price target Wednesday, to BRL4.00 from BRL8.00, on a weaker pulp price outlook. “Even after the [follow-on] offering, we see net debt/Ebitda at 5.8x [year-end 2012] and 6.9x [year-end 2013]. Thus, we still see the need for other measures (asset sales and partnerships) to control leverage while Suzano executes its growth project,” Barclays says. Suzano had lost 37.1% from its May 16 launch through Wednesday’s close, and its deal was not helped by the fact that peer Fibria has sagged 10.4% since its follow-on in April. Suzano had upsized the share total during the sale process by about 20% from the originally announced amount, to ensure it would raise enough, and it appeared to need its full overallotments Wednesday to bring the deal close to the BRL1.5bn target. Suzano is raising funds to strengthen its capital structure. BTG Pactual and JPMorgan were global coordinators on the sale, with Banco do Brasil, Bradesco and Itau as bookrunners. The deal was the last of the region’s large offerings on the calendar as of Wednesday. A number of unlaunched IPOs remain in the pipeline, but with the global markets lacking certainty their status is unclear.
Suzano Set for FO
Suzano Papel e Celulose is set to raise more than BRL1.4bn ($680m) from a follow-on equity sale, scheduled to price this evening. The Brazilian pulp and paper producer is offering 99.7m common shares and 192.3m preferred shares, up from the 80m common and 164.9 preferred shares initially announced. This would indicate a BRL1.48bn size, based on Tuesday’s BRL4.40 preferred share closing price, if a 15% greenshoe is also used. Suzano is raising funds to strengthen its capital structure. BTG Pactual and JPMorgan are global coordinators, with Banco do Brasil, Bradesco and Itau as bookrunners.
Banvor to Get Equity Injection
Banco Votorantim is preparing a BRL2bn ($971m) equity increase, says Banco do Brasil, which owns half of the Brazilian lender. BRL1bn would come from Banco do Brasil and the other BRL1bn from Grupo Votorantim, through the Votorantim Financas unit. It does not offer additional details of the operation, which is subject to shareholder approval.
Cencosud Pleased with NY Debut: Paulmann
The pricing of Cencosud’s $546m equity sale was in line with the company’s expectations, its top officials say, as the Chilean supermarket operator debuts its shares in New York and raises funds for expansion. “To have 6x demand for the offer is extraordinary, especially on a day when the US market fell 250 points” founder and chairman Horst Paulmann tells LatinFinance. “Leaving 6%-7% on the table wasn’t a mistake – quite the contrary. It was in line with our philosophy of live and share,” he adds, noting that as in the retail business, the most important thing isn’t always the lowest price, but rather price with quality. The retailer sold 45.5m shares in Santiago at CLP2,600 ($5.17) each, and 59.5m shares in the form of ADS at $15.61 each, including an overallotment option. The 2,600 price represents a 7% discount to the previous CLP2,795.9 closing price, and did not meet a CLP2,730.3 minimum the issuer had previously indicated. Total demand was CLP1.57trn, with CLP1.08trn in competitive demand. About 47% of the sale went to long-only ADR buyers, with 22% to domestic pensions, 8% to domestic retail, 7% to other local investors, 6% to non-ADR buying foreigners, and the remainder to other investors, the company says. Cencosud is raising funds to pay down debt and to fund the acquisition of Jumbo Retail Argentina, in addition to general corporate purposes. “This will give us the flexibility to grow in the next years. We are very comfortable with the capital increase,” CEO Daniel Rodriguez tells LatinFinance. With no large maturities in the next three years and last year’s $750m international bond under its belt, Rodriguez does not expect new fundraising of any kind in the near future, as the retailer turns its focus to organic expansion. “We see Brazil as a great market. Brazil in the last 4 years in the supermarkets segment has become our biggest operation, and we think in the next 3 years it will offer much opportunity. Our focus will be on organic growth in super
Totvs Focused on Eventual NY Debut
In the midst of ongoing expansion and consolidation of its sector, Brazilian IT and software provider Totvs sees an eventual New York equity listing as a way to increase exposure and perhaps raise new funds. “We are working to be prepared to list in the US at the right moment. The reasoning is clear to be in New York – to be at the global standard and be listed along with comparable businesses,” CFO Alexandre Dinkelmann tells LatinFinance, noting especially a lack of peers in Brazil. The move would not be immediate, and Totvs is looking at a 3-year horizon for the listing, which could involve the raising of new funds. Mostly, however the company is not in need of new funds, thanks to a strong cash flow, even as they continue acquiring. “We are always looking at opportunities in Brazil and outside of Brazil, the deal flow will continue and we will be a natural consolidator,” Dinkelmann says. Brazil is the cornerstone, and LatAm beyond that, but he says the goal is to lead the market for SME services in the emerging markets.