The board of Brazil’s Renova Energia has approved the sale of a BRL315m ($153m) stake to BNDESPar, Renova says. In the deal the investment arm of the BNDES development bank will buy 112.4m units at BRL28.00 each. Renova units stood at BRL31.49 Monday. Renova is also preparing a BRL300m debenture sale in Brazil’s domestic market.
Category: Equity
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DCM, ECM Issuers Again with Little Clarity
Although a Spanish bailout has been set up and Greek elections have passed, there is still little assurance for Latin Americans waiting to issue in the debt and equity markets. Global sentiment was calmed somewhat after Sunday’s Greek elections, but issuers still find themselves on difficult footing. “The market consensus is Greek avoidance of short-term catastrophe, but investors are cynical about the medium to long-term outlook. There is still uncertainty, and people are disappointed. My feeling is that investors are relatively conservatively positioned at this moment,” says a New York-based EM debt portfolio manager. Noting strong performance from high-grade bonds, investors say issuance from high-quality LatAm issuers would still be welcome, just as it has been throughout the periods of volatility. “Last week people were worried about the Greek elections and the market is still trying to digest what this means and not sure what comes next. Maybe the G20 meeting will give us some insight, but expect more of the same,” says a LatAm DCM banker. Paraguay’s Banco Continental and Bermuda remain on the road, though neither would likely be a very large sale. On the equity side, Cencosud is poised to test the waters with a New York and Santiago follow-on, pricing Thursday to raise about $600m, a target reduced last week due to volatility concern. Brazil Pharma is scheduled to raise about BRL600m ($293m), also in a follow-on that evening. After a Suzano Papel e Celulose follow-on next week, targeting BRL1.5bn, there are several IPOs in the pipeline that could price in July. Issuers face the decision now as to whether to launch. Bankers say the larger IPOs – such as CPFL Renovaveis, Quieroz Galvao Oleo e Gas, and “re-IPO” Taesa – have the best shot. “I expect to see 2-3 deals before July, but conditions should pick up before the end of the year. The bad mood is justified, but somewhat exaggerated,” says a Sao Paulo-based ECM banker with deals in the pipeline. Barclays Cap
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Second Evaluation Means Redecard Offer Fair: Itau
Itau’s BRL11.8bn ($5.75bn) offer for the remainder of Redecard is in line with an appraisal requested by a minority investor, the bank says. Credit Suisse puts the credit card payment-processor’s value at BRL34.66-BRL38.12, meaning Itau’s BRL35.00 offer is justified by the latest evaluation, ordered by minority holder Lazard Asset Management, after it called a previous evaluation too low. In April Rothschild found the value to be BRL34.18-BRL37.59. Itau, which owns 50% of Redecard, has said it does not plan to increase the price if its offer – launched in February – is rejected. The bank aims to delist Redecard, which held an IPO in 2007. Redecard shares closed Monday at BRL33.35.
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Camargo Ups Offer for Subsidiary
Brazil’s Camargo Correa has increased its offer to acquire all outstanding shares of its Camargo Correa Desenvolvimento Imobiliario (CCDI) real estate unit, it says, and could now spend up to BRL210m ($101m). It will now offer BRL5.50 per share, up from the BRL4.70 announced in March. The increase comes after a new evaluation of CCDI’s share price by Santander, that had been requested by minority shareholders. Camargo plans to hold a public tender for the 38.25m outstanding shares, or 33.85% of the company, and delist CCDI upon conclusion. It does not disclose the timetable. CCDI shares closed Wednesday at BRL5.31.
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Lupatech Raises BRL261m
Lupatech’s capital increase has reached BRL261m ($126m), it says, following subscriptions from major shareholders who had pledged to participate. The Brazilian maker of parts for the oil industry sold 65.2m shares at BRL4.00 each, with Petrobras pension fund Petros putting in for BRL105m, BNDESPar BRL80m and private equity firm GP Investimentos BRL50m. In the subscription period closed June 6, 175m shares were up for sale, as part of a plan to raise up to BRL700m agreed earlier this year. Remaing shares are to be sold through an additional round from June 13-19, at the same price. Shares closed Wednesday at BRL3.85.
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Tereos Plots Capital Raise
Brazilian sugar cane miller Tereos Internacional plans to raise up to BRL369m ($179m) from a private share placement, it says. The company will issue a total of 142m shares to current holders at BRL2.60 per share. The firm controlled by France’s Tereos Group plans to use the proceeds to finance its expansion program. Tereos pulled the plug on a public follow-on of up to BRL600m last year when the markets became too volatile.
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Fondo de Fondos Plans CCD
Corporcaion Mexicana de Inversiones de Capital (CMIC), also known as Fondo de Fondos, is preparing a transaction for Mexico’s Certificado de Capital de Desarrollo (CCD) market, according to regulatory documents. The 2026 deal would create a MXP1bn-MXP5bn ($71m-$355m) fund investing along side CMIC’s FdeF II fund, seeking investments in other funds targeting real estate, infrastructure and other areas. As with most CCD deals, the structure includes a return of the initial amount plus a 10% preferred return. ING is managing the transaction. CMIC is backed by Nafinsa, Focir, Banobras and Bancomext, and launched the $250m FdeF I fund in 2010.
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Minsur Adds to Mine Equity
Peru’s Minsur has injected an additional $100m into its Cumbres Andinas subsidiary, via the issue of new shares, to help finance the acquisition of a stake in the Marcobre copper project, it says. The funds follow a $300m equity issuance announced last week for the same purpose. After the transaction, Minsur will hold 99.96% of Cumbres’ shares. It is already putting together a $200m loan to help with the purchase. In April, Minsur agreed to acquire 70% of Marcobre from Hong Kong’s CST Mining for $505m.
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Suzano Ups Follow-on
Suzano Papel e Celulose has increased the number of shares it plans to sell in a follow-on equity sale, it says, meaning the deal could raise more than BRL1.5bn ($726m). It 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 BRL1.56bn size, based on Monday’s BRL4.65 preferred closing price, if a 15% greenshoe is also used. Marketing for the deal was scheduled to begin Monday, ahead of a June 27 pricing. 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.
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Cencosud Lowers Equity Expectation
Chile’s Cencosud has reduced the size of its planned New York equity sale, to about $590m, from about $720m, it says. The retailer now expects to sell 91.3m shares, in the form of ADS, down from 125m it was targeting in filings last month. A 15% greenshoe would bring the total to 105m, raising $591m at Friday’s closing price. The exact date has not been set, though it is expected in the next few weeks if market conditions permit. ECM bankers see a stiff challenge for issuers to get equity deals out ahead of the traditional July-August vacation period, with only follow-ons and large, liquid IPOs likely to get done. The supermarket operator is raising funds to pay down debt, and to fund the acquisition of Jumbo Retail Argentina, in addition to general corporate purposes. Each ADS would be worth 3 common shares, and initially referenced by ADRs. Credit Suisse, JPMorgan, Morgan Stanley, UBS, Santander and BBVA are managing the deal, done as part of a $2bn total capital increase approved last year. Cencosud has operations in Chile, Colombia, Peru, Argentina and Brazil. Its common shares closed at CLP2,849 ($5.63) Friday.