Category: Equity

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.

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.

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.