Category: Equity

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 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 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.

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.

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.

Brazil Pharma has priced a BRL553m ($268m) equity follow-on, landing at a 2.6% discount. The retail pharmaceutical company sold 52.8m primary shares, and 7.0m secondary shares at BRL9.25 each, including the exercise of a 15% greenshoe. This level compares to Thursday’s 9.50 closing price, which had lost 0.52% Thursday, in a session when the Bovespa plummeted nearly 3.0%. Half of the primary proceeds are going to strengthening the issuer’s capital structure, 40% to new acquisitions, and the remainder to making improvements to existing operations. The secondary portion featured shares sold by the Silveira family. BTG Pactual, Bradesco and Citi managed the sale.