PDG Realty’s board has approved a plan from private equity firm Vinci partners to raise BRL800m ($390m), the homebuilder says. Under the proposal, unveiled last week and aimed at strengthening PDG’s finances, Vinci would raise BRL800m through the sale of warrants entitling each holder to one new share and one convertible debenture at BRL4.02 each. This represented an 11.4% premium to the previous closing share price and a 20.7% premium to Monday’s BRL3.33 close. The debentures acquired under the plan could be converted after 4 years into one additional new share at a minimum of BRL6.00 per share. Vinci would contribute between 54.8% and 81.4% of the fresh capital under the plan. In a change from the original Vinci proposal, PDG modified the lock up period to 4 years from 2. The plan is still subject to shareholder approval.
Category: Equity
Steelmaker Wraps up Follow-on
Colombia’s Acerias Paz del Rio has finalized its equity follow-on, raising the COP271bn ($155m) it targeted. The steelmaker controlled by Brazil’s Grupo Votorantim sold 9.05bn shares at COP30.00 each. The sale period ending May 25 was open during a rough period in the international markets, but being a follow-on directed towards existing holders made it easier to get done. The sale was said to go almost entirely to existing shareholders, with a demand of about 3x. Proceeds are marked for repaying debt and funding investment in a mining program. Corredores Asociados managed the sale. Votorantim owns 72% of Paz del Rio.
July IPO Season Challenged by Sour Markets
The Bovespa and Mexican Bolsa continued to lose ground along with global equity markets last week, creating fresh doubts about the IPOs in the Mexican and Brazilian pipelines that had hoped to price before the traditional August vacation period. Follow-ons might still get done, bankers say, but the 5 Brazilians and one Mexican with filed documents now face longer odds to get a deal done in the July window. If bad news continues, a repeat of 2011, in which few deals were done in the second half, is possible. “Markets are very challenging for equities. We are unlikely to see IPO’s [from LatAm] anytime soon,” says a New York-based ECM banker. Poor US job numbers last week, as well as continued fallout in the US IPO market from the problems surrounding Facebook’s recent IPO, also don’t help the situation. “At a reasonable price, some of these deals could still get done, but if the markets soften further it will be very difficult,” another ECM banker says. A follow-on from Brazil Pharma scheduled for June 21 and Suzano, for June 27, still are likely to get done, bankers say. However, IPOs to be launched from Mexico’s Vesta and Brazil’s CPFL Renovaveis, Vix Logistica, Pague Menos, LDC Bioenergia and Manabi, some of which are in pre-roadshow marketing, may not have the same luck. For some in the pipeline, alternatives include a record amount of private equity cash deployed in the region, as well as strategic investors. Eike Batista’s gold mine unit, planning a Colombia listing for the AUX gold miner, has hired Bradesco to seek funding alternatives, according to a spokesperson, though the public sale could still happen if conditions permit. EBX has already sold chunks of itself to international strategic investors looking to get into Brazilian commodities and infrastructure plays at the pre-IPO stage. The Bovespa dropped 1.95% last week and has lost 5.91% year to date. Mexico’s Bolsa shed 0.81% last week, though it is still up 0.28% on the year. ECM volume stood at $9.04bn
Petrominerales Clinches Converts
Petrominerales has priced a $400m convertible bond sale, it says. The 3.25% 2017 bonds are convertible in to common shares at $18.0017 per bond, representing a 35% premium to Thursday’s closing price. The shares closed Friday at CAD31.04 ($12.54). The Toronto-listed Colombian oil producer is raising money to fund a tender offer, through which it is to buy back $250m of its 2.625% 2016 bonds, at a price of 98.5. The operation leaves $272m outstanding in the 2016s ahead of a 2013 call date. ABG Sundal Collier Norge managed both the sale and the tender.
BNDES Converts MPX Bonds
BNDESPar has raised its stake in MPX Energia to 11.7% from 2.6% through the conversion of debentures, MPX says. The investment arm of BNDES converted 10.7m debentures into shares, giving it a 19.9m-share total stake. BNDESPar bought BRL600m ($297m) in the converts last year as part of a BRL1.37bn sale, in which Gavea Investimentos, controller Eike Batista and minority holders also bought in. The 3-year bonds pay the ICPA inflation rate plus 4.00%, and would be convertible at any time until maturity at BRL43.00 per share, meaning a BRL460m operation Thursday. The shares closed Thursday at BRL34.65.
Oi Boosts PT Position
Brazil’s Oi has raised its stake in Portugal Telecom (PT) to 10%, PT says. Between April 24 and May 24, Oi’s Telemar Norte Leste unit bought 25.1m shares, meaning it spent EUR77m ($95m) at Thursday’s EUR3.05 closing price. The increased holding means Oi reaches a milestone agreed in a deal initiated in 2010, in which PT bought a 25% stake in Oi.
Carvajal Wraps up Packaging IPO
Colombia’s Carvajal Empaques has raised COP195.8bn ($104m) from its IPO, it says, allocating 36.9m shares at COP3,500 each. The unit of the Carvajal conglomerate picked a tricky time for the sale, given the volatility in global equity markets, and the total fell short of a COP212bn target. The IFC has bought COP27.22bn. About 56.4% went to Colombian institutions, the company says, with 29.6% to Colombian retail investors and 13.93% to foreigners. Corredores Asociados managed.
Telefonica Mulls LatAm Listings
Telefonica will consider the listing of some of its Latin American businesses, it says, as part of a plan to raise funds that also includes a German listing and disposal of non-core assets. M&A bankers say the ground remains ripe for European companies to sell part or all of LatAm assets as they seek to raise cash, with large Latin American firms, as well as players from Asia, in prime position to scoop them up. Telefonica operates in Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay, Venezuala and Central America.
BTG PE Makes Domestic Goods Investment
BTG Pactual’s private equity arm has agreed to acquire 40% of retailer Leader Participacoes for BRL665m ($334m), it says. Under the terms of the deal, BTG’s funds will pay BRL558m for a 35.88% position. Leader will then hold a rights offering, through which BTG will buy new shares worth another 6.42%. The deal also allows BTG to buy an additional 20%-30% during a 90-day period following the rights offering. Leader operates in the clothing and housewares sector. The transaction is subject to regulatory approval.
Taesa Advances FO
Brazil’s Transmissora Alianca de Energia Eletrica (Taesa) has initiated the regulatory process for an equity follow-on, it says. Controller Cemig had planned to improve Taesa’s float and raise funds funds through the sale, which could reach BRL2bn ($1bn), since purchasing the assets from Italy’s Terna in 2009. The transmission company does not give the size or the timing of the all-primary share deal, to be managed by Bank of America Merrill Lynch, BTG Pactual, Banco do Brasil, Goldman Sachs and Santander. The proceeds will be used for investments and expansion. Taesa will offer its units in the sale, consisting of one common and two preferred shares. Taesa’s units closed at BRL65.50 Tuesday.